Chicago unamused, wants amusement tax from StubHub
eBay’s $310 million acquisition of ticket reselling site StubHub presents the potential of additional expenses, as the City of Chicago demanded payment of amusement taxes on tickets sold for Chicago events.
It’s no surprise that Chicago wants a piece of the action every time a ticket changes hands for a city event. Chicago called for a little juice when someone takes a ticket and resells it to someone else for an event in the city.
Internet Retailer said the city’s legal representatives want StubHub and other websites to collect and pay Chicago’s 8 percent amusement tax for each of these transactions, of which the city believes it is owed some $186,000 to date. City attorneys also content eBay and StubHub aren’t being very forthcoming with information for the case:
The city, represented by city attorney Mara Georges, contends in the lawsuit against eBay that the e-marketplace maintains relationships with businesses based in Chicago but that the city needs to “engage in discovery to determine the full extent and specifics of Defendant’s operations and amusement tax liabilities.”
The city charges that eBay and StubHub have refused to comply with a request to submit their records on ticket sales since last year, which triggered the imposition of fines set at $500 per day until the matter is settled.
eBay doesn’t think it owes the amusement tax, a position that should lead to a protracted lawsuit. We’re wondering how the idea of a first sale of a ticket will be treated by the court; allowing Chicago to collect an amusement tax each time a single ticket has been resold looks like a slippery slope to us.
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