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Monday, October 19, 2015

HMB's David Hughes Quoted in Tax Analysts About Mayor Rahm Emanuel's Changes to Business Side of Cloud Tax

Chicago Mayor Proposes Changes to Business Side of Cloud Tax

Tax Analysts, October 19, 2015

By Maria Koklanaris   

"David A. Hughes of Horwood Marcus & Berk Chtd. in Chicago said that while it was clear Emanuel was trying to help some members of the tech community, there are several concerns about his changes from a state tax perspective.

Hughes said businesses should be aware that a subsidiary of an older, established business is not a "small new business."

The ordinance would apply a unitary business principle, Hughes said, adding, "It is interesting that for a non-income tax they would adopt something like that."

He also said the reduction of the tax rate for specific services is problematic.

"The question becomes what is data, what is information, and who does it belong to?" Hughes said. "Is it equal, is it uniform, could it be discriminatory that one vendor has to collect 9 percent sales tax and the other can collect 5.25 percent? Almost by necessity, you have created additional issues here. You potentially have these uniformity and equal protection concerns.""

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Copyright 2015 Tax Analysts. Reprinted with permission.

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