Chicago starts taxing ChatGPT, artificial intelligence

Chicago levies a 9% tax on leased computer software, which the city now claims includes artificial intelligence such as ChatGPT.

Add ChatGPT to the list of things Chicago taxes: As of Oct. 1, Chicago’s personal property lease transaction tax slapped a 9% tax on the artificial intelligence platform.

The tax applies to leased computer platforms such as ChatGPT’s premium subscription. Users can avoid the tax by opting for the free version. If someone works in the city but mostly uses ChatGPT outside the city, they aren’t subject to the tax.

The platform uses artificial intelligence and natural language to answer questions or help compose things. It can be used to write emails, reports or even computer code.

Small businesses can apply for an exemption. Government bodies, insurance companies, charitable organizations, educational institutions and religious organizations are also exempt.

The tax was originally designed to tax rented buildings and cars, but now it’s expanded to computer software. Taxing services people use to work gives them a reason to work outside of Chicago, whose leaders seem to always be looking for new ways to tax businesses and residents thanks largely to city pension debt.

Chicago has more pension debt than 44 states. Thanks to a bad business climate, Chicago saw its downtown office vacancy rate hit an all-time high this summer.

While the ChatGPT tax may not pose as big a threat as the proposed “mansion tax” does to commercial property, it’s still another message to businesses that Chicago’s more interested in your tax dollars than your jobs and the economic vitality your business could bring.

City leaders should make it easier for businesses to thrive. One way to do that is by putting an end to the nickel-and-diming of businesses.