Cloud tax – upsets Chicago tech community: Life just got 9 percent


#

‘Cloud tax’ upsets Chicago tech community: ‘Life just got 9 percent harder’

Chicago’s new 9 percent tax on streaming and cloud services appears to have the local technology community agitated and, more than anything, confused.

Reports on Wednesday of the “cloud tax” took many Chicagoans by surprise, leaving providers and consumers of streaming and cloud services scrambling to understand the implications. Technology companies, among the heaviest users of cloud services, are likely to be taxed for the services they use as well as those they provide.

The cloud tax extends ordinances governing two types of taxes — the city amusement tax and the city personal property lease transaction tax. The taxes cover many products streamed to businesses and residents. They also cover use of various online databases that could especially affect businesses.

The city expects the taxes to bring in about $12 million a year.

Adrian Holovaty, founder of music-education web platform Soundslice. said he doesn’t know how the tax changes affect his business.

Holovaty’s questions include which of his subscribers should be taxed; whether he should be tracking his user’s physical locations; and how the city will enforce tax collection.

“I’m trying to hold off on being frustrated or angry until I actually understand what the new rules are,” Holovaty wrote in an email to Blue Sky. “But at face value, it seems like this new policy flies in the face of Mayor Emanuel’s efforts to build the tech community here.”

Confusion is driving widespread anger over last week’s quiet enactment of a “cloud tax” in Chicago, said Harper Reed ⇒. technologist and CEO of mobile commerce startup Modest.

“We need clarity on what it actually means, what it actually means for all of us,” Reed said. “What, as businesses, we.

Confusion is driving widespread anger over last week’s quiet enactment of a “cloud tax” in Chicago, said Harper Reed ⇒. technologist and CEO of mobile commerce startup Modest.

“We need clarity on what it actually means, what it actually means for all of us,” Reed said. “What, as businesses, we.

Several in the Chicago tech industry criticized the mayor and the city for creating an environment that they see as less friendly to tech startups than other places around the country.

Terry Howerton ⇒. co-founder at TechNexus, a private-sector venture collaborative, said the rulings do not properly define categories such as “cloud computing,” leaving them open to apply to almost any company.

“Every tech startup in Chicago is either using cloud computing services or selling them, and the city being the first to set this precedent puts us at a disadvantage to every other major tech hub. or even our own suburbs,” Howerton wrote in an email to Blue Sky.

Blagica Bottigliero, an Oak Park resident and longtime member of Chicago’s tech community who now serves as VP of digital media for California-based Metaverse Mod Squad, said the additional tax makes Chicago a less attractive location for startups.

John Byrne and Amina Elahi

Chicagoans who pay to stream movies and music from services like Netflix and Spotify will now need to fork over an additional 9 percent for the privilege, as will Chicago businesses that pay to use everything from real estate to court databases online, under a decision the city quietly made recently.

Chicagoans who pay to stream movies and music from services like Netflix and Spotify will now need to fork over an additional 9 percent for the privilege, as will Chicago businesses that pay to use everything from real estate to court databases online, under a decision the city quietly made recently.

(John Byrne and Amina Elahi)

“I wouldn’t be surprised if people look at other alternatives of places to go to that are near the city,” Bottigliero said.

She said she understands that the city needs to add revenue but that doing it this way hurts startups.

Michael Reever, VP of government affairs at the Chicagoland Chamber of Commerce, criticized the taxes as quick, insufficient fixes to larger fiscal problems.

“Given the economic climate and the economic picture, this is a step backward to making Chicago a tech hub,” Reever said.

Justin Massa ⇒. founder of restaurant data startup Food Genius, said his company has been using cloud services efficiently but that they remain his second-biggest expense after labor. Food Genius can handle the 9 percent cost increase for those services, Massa said, but it’s “not insignificant.”

Beyond the additional dollars Food Genius will owe, Massa expressed concern about how the tax will affect sales. Food Genius customers pay a subscription to access its cloud-based database.

“To customers that we call on in the city of Chicago, we just got 9 percent more expensive,” Massa said. “For anyone selling cloud services, life just got 9 percent harder.”


I-66 toll plan rolls forward – The Washington Post #dr. #gridlock, #virginia


#

I-66 toll plan rolls forward

In the summer, drivers on Interstate 66 will see crews preparing for the toll-gantry system along the lanes inside the Capital Beltway.

It won’t take long, compared with other major transportation projects. The tolling signs will be activated about a year later, in mid-2017. The image above gives drivers an idea about what they will see as they approach the entry points for I-66.

There’s still some planning left. This week, the Virginia Department of Transportation is holding public hearings on design details. The first was Monday night at the Washington-Lee High School in Arlington, the second is from 6 to 8 p.m. Tuesday at Eagle Rock Middle School in Ashburn, and the final is 6 to 8 p.m. Wednesday at VDOT’s Northern Virginia headquarters, 4975 Alliance Dr. in Fairfax.

The Monday night hearing in the school cafeteria drew several hundred people, who studied the project’s display boards and listened to a presentation by Amanda Baxter, the project’s manager for VDOT. At the end of her talk, the floor was opened for public testimony. But out of the crowd of several hundred, only six wanted to talk. This was remarkable, given the long, controversial history of the interstate inside the Beltway. Arlingtonians live in the project’s corridor and will feel the full effect of it, both as residents and commuters.

People who have been following this project for the past year suggested that people may be holding their fire for VDOT’s upcoming sessions about a separate project that will widen the eastbound side of the highway for four miles between the Dulles Connector Road and Ballston. The widening was part of a compromise reached only last month between Gov. Terry McAuliffe (D) and the General Assembly, which was considering bills that would have blocked the high-occupancy toll-lanes project. The state needs to prepare an environmental assessment for the widening and hold hearings that are likely to draw close scrutiny in Arlington. Construction could start in early 2018 and be completed in early 2020.

The tolling signs that will appear on the approaches to I-66 will look familiar to travelers on the west side of the Beltway and on I-95 in Northern Virginia. But as Falls Church City Council member David Snyder pointed out during his testimony Monday, “I-66 inside the Beltway is a unique highway.” For much of the nine-mile route, it’s two lanes in each direction through highly developed suburbs leading into the District, where many drivers come to a halt for a traffic light at Constitution Avenue NW.

Snyder and many of the project’s planners are counting on new programs that will help drivers leave their cars behind. These new programs, including enhanced carpooling and commuter buses, will be financed with toll revenue. The project’s success depends on them, Snyder said.

The Northern Virginia Transportation Commission soon will select a first round of projects that can be ready to go when the high-occupancy toll lanes open.

The HOT lanes will replace today’s high-occupancy-vehicle lanes, which allow I-66 access at rush hours to two-person carpools and those with exemptions, such as drivers of certain hybrid cars.

Arlingtonians have mixed feelings about the project. Creating HOT lanes means that the lanes will be open at rush hours to solo drivers willing to pay the variable toll. Some fear that will greatly increase the traffic on I-66. Others fear the tolling will push today’s I-66 drivers onto parallel routes and neighborhood streets. VDOT traffic models do not show a significant effect on such routes, but even projects that are overall successes can have some unintended consequences that their planners need to revisit after the project opens.

The Tuesday night hearing at the Eagle Rock Middle School cafeteria, 42901 Waxpool Road, Ashburn, is likely to draw a crowd with different concerns. Many will focus on the impact of tolls on long-distance commuters, including those who today pay tolls to use the Greenway and the Dulles Toll Road before they reach I-66 inside the Beltway.