Chicago Mayor Rahm Emanuel has proposed a new revenue ordinance detailing changes to Personal Property Lease Transaction Tax Ruling #12 regarding Chicago’s taxation of cloud services. Per the ordinance’s proposal, in the case of a nonpossessory lease of a computer primarily for the purpose of allowing the customer to use the provider’s computer and software to input, modify or retrieve data or information that is supplied by the customer, a reduced tax rate of 5.25% would apply to the lease or rental price. The ordinance also proposes a small business exemption. A “small new business” would be exempt from paying the tax if it has a valid and current business license, under $25 million in gross annual sales and has been operating for less than 60 months since its first sale. New small businesses that are lessors will also not be required to collect the tax from its customers. We’ll continue to monitor the situation. There are still a number of open issues and the City Council has not yet approved the changes. For our previous news item on the Chicago cloud tax, visit Chicago Issues Rulings on Amusement Tax and Personal Property Lease Transaction Tax. For an update on this news item, click here. (2016 Revenue Ordinance)