Chicago Sues EBay, StubHub To Collect City's Amusement Tax
The city of Chicago Monday filed a suit in Cook County (IL) Circuit Court against eBay and StubHub accusing the two ticket brokers of "failing to collect amusement taxes on 'thousands of tickets' to concerts, sporting and cultural events," according to Spielman & Patterson of the CHICAGO SUN-TIMES. The suit claims that eBay and StubHub "are 'resellers agents"' and as a result are "required to collect the amusement tax and fork it over to the city." The city's 8% amusement tax ordinance "defines a resellers agent as 'a person who, for consideration, resells a ticket on behalf of the ticket's owner or assists the owner in re-selling the ticket.'" The City Council Finance Committee in '06 originally held a hearing on a potential lawsuit, and at the time Finance Committee Chair Edward Burke "estimated that as much as $16[M] was slipping through the city's fingers because of growing Internet purchases." Burke in '06 said, "One registered ticket broker paid $140,000 in amusement tax on White Sox post season. Ebay, it is estimated, is 20 times the size of that broker. That's $2.8[M]. And if StubHub is 10 times the size of that broker, that's $1.4[M]. One day, Stub Hub had 882 tickets listed for a single Bears game with an uncollected city tax of $17,950" (CHICAGO SUN-TIMES, 5/20). The lawsuit "seeks a court order allowing the city to audit the companies and award fines for failing to collect and pay the tax." Both eBay and StubHub said that they will "fight the lawsuit" (CHICAGO TRIBUNE, 5/21).
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