How is this "extortion"? You pay sales tax when you buy a DVD or go to a movie, why should Netflix be tax free? I mean you can have a philosophical opposition to consumption taxes, but that's different.
Local businesses operating physically inside the city consume resources to some extent. They use the roads, sidewalks, buildings, cause people to walk/drive to certain places, etc. They pay for rent and other expenses, but also use/benefit from city resources that they aren't directly charged for.
But netflix obviously doesn't have any physical presence in chicago.
It doesn't matter. Chicago residents now subsidize Chicago services some other way. (Via this Netflix tax.) End of (that) story.
Is it good that Chicago is subsidizing services by taxing some other activity, mainly those that are not really utilizing those services, and taxing residents that might not even use or benefit (directly) from those services? Well, maybe not. But since it only provides a very small selection pressure it's unlikely that residents will move out, or speak out.
Consumption taxes are usually passed on to the consumers even if they are collected by the seller. Making the seller responsible just makes tax evasion harder.
One difference is that when I buy a DVD from an out of state seller that does not have a presence in my state, I'm the one responsible for paying my state's sales tax [1]. The out of state seller is not, and my state has no authority to require them to do the collection for it.
I think that when OP referred to extortion, he was referring to Chicago collecting through Netflix, instead of requiring its residents to remit the tax themselves.
If Netflix does not have a sufficient nexus with Chicago to force them to collect, I too would like to see them tell Chicago to go suck donkey lincolns. My reason is not because of any philosophical objection to their tax, but simply because of the effects if other municipalities also decide to do this.
Collecting tax for thousands of municipalities would be a nightmare. There would be a plethora of ways they would provide rate data. Some would have a reasonable way to get it, like a URL that retrieves the current rate and valid date range, and the upcoming rate when it is going to change. Some would have arcane online protocols. Some would have a .DOC file you can download. Some would have it in a memo that you can get a PDF copy of. UUUUUUGGGGGGGGGHHHHHHH!!!!!
Then there would be actually paying the tax. That would be like getting rates--many different methods of reporting, with many different requirements for what you have to report.
I've seen this with sales tax, and with VAT in the EU. Every Thor damned taxing authority seems to assume that they are the only taxing authority you are collecting taxes for, so if they make part or all of the process hard to automate it is no big deal. Let every municipality in on this, and small companies will need a full time person just dealing with tax rate tracking and tax reporting.
[1] well actually it's my state's use tax, not my state sales tax, in this case, but for all practical purposes they are the same.
> If Netflix does not have a sufficient nexus with Chicago to force them to collect, I too would like to see them tell Chicago to go suck donkey lincolns
Sadly, Netflix appears to have a shipping center in Chicago (and 3 more in other parts of Illinois), so they probably can be forced to collect.
Spotify appears to have an office in Chicago (their jobs page has an opening for Sales Development Manager, Midwest, listed as being in Chicago, and Chicago is an item on the ___location dropdown on that page).
Apple has two retail stores in Chicago.
Amazon has a warehouse there.
Microsoft has an office there.
Rackspace has a datacenter there...and I just realized that tzs.net is in that data center. Oops. I'm not selling anything, so it's not a problem now, but I'll probably move it to Dallas to future proof it.
Extortion: the practice of obtaining something, especially money, through force or threats. [1]
It's the literal definition of extortion. If you don't give the government your money, they'll [shut your business down|throw you in jail|fine the hell out of you]. The DVD tax is also extortion, but it's more easily justified because there are actual physical things moving through the city's jurisdiction.
The Wikipedia definition is more apt here, and solves the confusion that you're having:
> Extortion (also called shakedown, outwrestling, and exaction) is a criminal offense of obtaining money, property, or services from a person, entity, or institution, through coercion.
It's not a criminal offense when the government is doing it legally, which they are in this case because the legislature passed a law through the normal process.
It's saying that extorsion is a criminal offense, not that only criminal offences can be extorsions. In other words, the criminal offense originate from the act of extorsion, not the reverse.
Even admitting that there can be some taxes that are less kosher than others even if legal, how is that the cars here? How is this different than any other consumption tax?
