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1871 Statement on Changes to Cloud-Based Technology Taxes in Chicago

There has been a lot of discussion in recent days objecting to the City’s recent announcement that it will continue to enforce a long-standing tax on the use of certain streaming and cloud-based technologies. This is primarily because the enforcement and collection of the tax would hinder the development of startups whose businesses rely upon or provide cloud computing and related services. Taxes like this would conflict with Mayor Emanuel’s agenda to make Chicago the premier location to develop new technology businesses, an agenda that the Mayor has pursued with great success over the past four years.

Mayor Emanuel listened to the concerns expressed by 1871 and others in our community, and will be introducing exemptions and other relief for startups and other small businesses from these taxes. By ensuring that startups dependent on cloud-based technology are not subject to the tax, the Mayor has created an effective solution for our community and reaffirmed his commitment to ensuring that new digital businesses can continue to grow and create jobs throughout Chicago. We are appreciative of the growing vibrancy and economic contributions which the tech community is making to the city, and look forward to more opportunities to represent the community and to help shape Chicago’s economic future.

The Mayor's Office sent us the following statement:
"... we will announce that the administration will be taking measures to provide relief to small businesses so as not to put them at a competitive disadvantage with their peers in other cities. It will take us a month or so to formalize the proposal, but it will basically exempt start-ups (based on revenue) from paying the tax. Obviously a lot of legal issues here as this tax has been on the books for decades, but we are confident we can work through them."

Topics: Insights