Data Tax in Chicago

January 7, 2012

The city of Chicago levies a 14.5% tax on data.  Did you know that?  My friend, Craig Pirrong looked at his hotel bill after his recent stay and on top of the parking taxes, room taxes, and other taxes he paid, he got to pay and extra 14.5% for the honor of hooking up to the internet in his hotel room. 

Most travelers these days need to be connected.  They will be stuck paying the tax, or will they?

One way around the tax is to just use the phone system.  Tablets and phones hook up to the internet via cellular data plans.  Instead of hooking a computer up through a hotel ethernet or wireless system, they could just use their 3G network.  

Another way is to go to a coffee shop with free wireless and hook up.  When I go to Starbucks these days they are always crowded with people using the free wi-fi they provide.  Look for coffee shops near hotels to get even more crowded if the tax gets too high. 

It's important for governments to encourage entrepreneurship through low tax and low regulatory policies.  Unfortunately, most governments in the state of Illinois don't understand what that means.  They pay lip service to the notion, but their policies are very different from the words that flow out of their mouths.