Private Rulings Unveil Confusion Over Chicago’s ‘Cloud Tax'

More than half of all inquiries under a confidential tax guidance program in Chicago involve the city’s one-of-a-kind strategy for taxing cloud computing contracts, a public records search by Bloomberg Tax found.

Ten years of previously hidden tax rulings—often referred to as PLRs (private letter rulings) or GILs (general information letters)—show taxpayer confusion over Chicago’s tax programs for amusements, parking, leases, hotel rooms, restaurant bills, and real estate. But a majority of the letters focus on Chicago’s unusual push to tax businesses for their use of remote computing services, like information storage on the internet “cloud” instead of a computer ...