Chicago welcomes eBay (and sues them)

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As Chicago prepares to welcome eBay Live! to the city, it’s also taking them to court for for unpaid taxes on ticket sales.

The city has an “Amusement Tax” which is payable by ticket brokers for “theatrics, shows, exhibitions, athletics events and other amusements within Chicago”. They contend that both eBay and Stubhub are resellers agents and should be collecting the amusement tax on behalf of the city to the tune of some $4.2m a year.

If eBay, Stubhub and similar sites are to be turned into tax collectors for Chicago, then there’s nothing to stop every city in America imposing similar requirements. The burdon of assimilating different tax rates based on the venue of the ticket sold would be immense.

Let’s hope that eBay haven’t forgotten about taxes on eBay Live! or there could be tax collectors at the doors of the McCormick Convention Center 😛

2 Responses

  1. This doesn’t make much sense. Presumably the tax was already paid by the original purchaser (in the case of individuals or parties buying blocks for resale from the venues) and is accounted for and paid by the venue making the original sale.

    Even if the venue sells direct via a third-party platform, they would include the tax in the sale price; or in any event be responsible for the payments due on all sales in any given period. The platform used to sell them isn’t responsible and would have no reason to have an “account” with any city, state, or jurisdiction.

    Or is the city of Chicago suggesting that the tax is due on each and every re-sale of a ticket? “Double dipping” is generally frowned upon here. I’d like to see the city go after someone’s grandma who can’t make it to the Neil Diamond concert and sells her ticket on eBay or Craig’s List.

  2. The way I read it is that the tax is about like VAT or sales tax, you pay it on sales regardless if the tickets have already been taxed before.

    Plus in many cases the tickets are resold at way above the original face value and so the tax is considerably more 😯


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