Netflix and Quill: Using Access and Consumption to Create a Plan for Taxing the Cloud

Note, 58 Wm. & Mary L. Rev. (2017), Forthcoming

28 Pages Posted: 3 Aug 2016 Last revised: 2 Sep 2016

See all articles by William Fletcher

William Fletcher

Independent; College of William and Mary, Marshall-Wythe School of Law, Students

Date Written: August 2, 2016


On June 9, 2015, the Chicago Department of Finance created an uproar when its Comptroller, Dan Widawsky, issued two rulings extending the reach of Chicago’s amusement tax to include online streaming media, calling into question whether and how a tax can apply to film, television, and music in an age of streaming entertainment. But, the idea of an amusement tax is nothing new, dating back to at least the 1800s. Although taxing Internet streaming services may seem unprecedented, the amusement tax as a potential vehicle to do so is not. Immediate and widespread opposition, however, suggests that the world is not ready; Chicago’s tax ruling is already subject to bad blood, from a suit challenging the ruling to remarks made by the Federal Communications Commission, proposed federal legislation, and even delays in implementing the tax due to complaints from local businesses.

Even though it is understandable for both businesses and consumers — those ultimately responsible for bearing the cost of the tax — would be hesitant to accept a tax on streaming entertainment, more than likely such a tax may be inevitable. With the changing media landscape and transition to Internet consumption, state and local jurisdictions, without a means to tax many remote vendors, lose out on millions of dollars. Implementing a tax on online media allows taxing jurisdictions to recoup some of the losses specifically imposed on them by the cord-cutting trend transitioning from cable to online entertainment; Chicago alone expects revenues of up to $12 million. Despite opposition, this Note operates on the presumption that such a tax is foreseeable given changes in consumption habits and foreign trends to tax the same, and the purpose is not to debate moral wrongs, nor will this Note delve into concerns about copyrights, privacy, constitutional issues, or data security, which has so often been regarded as the focal of cloud concerns in academia. Rather, the purpose of this Note is to consider how such a tax on online media might mechanically function. The goal is not to evaluate Chicago’s Cloud Tax for Chicago’s sake so much as it is to model what a cloud tax should resemble in a given jurisdiction. This Note, for purposes of discussion, assumes a tax is inevitable, and instead of asking why, should, or when, it seeks the more pressing question of how, for in the end this is a question best left for Congress.

Keywords: cloud tax, streaming tax, netflix tax, netflix, quill, e-commerce

Suggested Citation

Fletcher, William, Netflix and Quill: Using Access and Consumption to Create a Plan for Taxing the Cloud (August 2, 2016). Note, 58 Wm. & Mary L. Rev. (2017), Forthcoming . Available at SSRN:

William Fletcher (Contact Author)

Independent ( email )

No Address Available

College of William and Mary, Marshall-Wythe School of Law, Students ( email )

Williamsburg, VA
United States

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