Exemptions From Tax Liability Obtained for Real Estate Listing Service under new Chicago “Cloud Tax”

Jim Sipchen, Brendan Nelligan, and Suzanne Crowley recently secured a significant victory for a real estate listing data service provider by obtaining a Private Letter Ruling from the City of Chicago Department of Finance confirming that the service provider was not subject to the City’s new 9% “Cloud Tax” on the use of internet database services. In June 2015, the City issued a tax ruling regarding the application of the City’s Personal Property Lease Transaction Tax (commonly referred to as the “Cloud Tax”) to cloud computing services and announced that it would begin enforcing this new interpretation of the Cloud Tax in September 2015 (later postponed to January 1, 2016). Jim, Brendan, and Suzanne were able to demonstrate to the City that their client was covered by certain exemptions in the ordinance, thus saving their client potential millions of dollars in back tax exposure.