Chicago Wants To Double-Collect Taxes On Event Ticket Sales

from the pay-more-taxes dept

Tue, May 20th 2008 11:08pm — Mike Masnick

eBay subsidiary StubHub seems like a pretty straightforward concept: it's a marketplace for event ticket resales. It's a huge market, and it makes sense to have a platform for people to resell tickets they've legally bought. However, StubHub seems to keep getting attacked and finding itself in court. First there was Ticketmaster, which complained that StubHub was violating Ticketmaster's "exclusive" rights to selling tickets to certain venues. Then there was the New England Patriots who demanded the names of whoever sold tickets through StubHub in order to punish the ticketholders. Now, the city of Chicago is suing eBay and StubHub, claiming that it needs to collect a special city "amusement tax" on each ticket sold. This is a pure money grab. The original ticket buyer already paid that tax -- and even if you accept the idea that resales should also be taxed (which is pretty questionable), then it seems like something that the actual seller should be responsible for, rather than StubHub/eBay itself. But, don't tell that to Chicago politicians who see this as an easy way to hit up a big company for millions of dollars. If this sounds similar to the attempts to suddenly get Amazon to pay up in other states, that's because it is. Seems like local governments are looking for any way to squeeze companies for extra tax dollars, no matter how little sense it actually makes.

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Filed Under: chicago, events, taxes
Companies: ebay, stubhub

20 Comments

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sachin, 21 May 2008 @ 12:28am

greed
Taxing many times on the same commodity not only is happening here but also happens in India for many things. This is a innovation of greedy people.
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doug, 21 May 2008 @ 12:37am

Watch out! The Mayor's city amusement tax is gonna get you. You can find it at the bottom of pretty much every bill, and it is, I believe, what makes buying and using World of Warcraft time cards over Amazon cheaper here than just setting up billing.
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Nate, 21 May 2008 @ 3:41am

Nothing out of the ordinary...
To have our money taxed twice is not out of the ordinary. Not saying this is right, infact, it is nice to see these sorts of situations get exposed. It helps people see how screwed they get in their taxes. If you think about your money, from start to finish, you probably loose about 50-60% to some sort of tax or gvmt fee. http://www.custompcmax.com
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Lucretious, 21 May 2008 @ 5:13am

for years one was considered a scumbag if they stood outside a concert event and sold a couple of tickets for a few extra dollars. Companies like this can now pre-buy all the choicest seats, charge triple+ of the face value of the ticket and they're considered entrepreneurs.
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- Chuck Norris' Enemy (deceased), 21 May 2008 @ 6:30am
  
  Re:
  Went to a Radiohead concert in St. Louis last week. I bought my tix through eBay (risky...but they were good). I think I only paid $15 more than if I would have bought them directly through Ticketmaster including all the fees. I did look at the Stubhub tix and thought how outrageous the prices were, ie. equivalant seats approximately $285 (I paid $165). It makes sense though, a large portion of the seats (not lawn/general admission)were empty the entire concert. So Stubhub resellers buy them en masse from Ticketmaster...less people can afford to go to the concert with decent seats and they don't buy tickets...Radiohead sees a bunch of empty seats/don't get a full venue crowd/hurt band's ego. At least Radiohead gets the money for selling all the tickets and resellers are left, hopefully, losing money on that concert.
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Killer_Tofu (profile), 21 May 2008 @ 5:25am

Two Things
Re #4
Nobody here is saying that buying tickets Purposely to resell them is an entrepreneur. I would still call them parasites and I still dislike them. However, that is no reason to add a tax to them. Adding a tax after the right of first sale will have many unintended consequences. There is the right of first sale where they have a chance to collect tax from this, and that should be the only place we allow the government to tax.

If the city wants a money grab, why not charge the oil companies. They have billions of dollars ... each .. every single quarter.
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Brandon, 21 May 2008 @ 5:41am

Tax
If I remember correctly, Chicago a couple years ago also tried to pass a tax or fee just to drive into it's downtown Loop area in hopes of collecting more money from business travelers/tourists and to get residents to use more mass transit.

So what's next, tax on items sold at a garage sale? Why not? We have to pay tax on things bought at Goodwill, don't we?
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Bryan, 21 May 2008 @ 5:46am

because that would be another tax on gas that the oil company's would simply slap on to our bill at the pump. We would still be paying and oil company's would still be making as much..or more.
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Greg, 21 May 2008 @ 6:23am

excessive fees/taxes
San Antonio already has a tax on yard/garage sale items, in the form of a required license (I think it's $10, maybe $15) to even hold such sales. I wonder if anyone enforces this, though. I'm glad I actually live just outside the city, so I don't have to cough up those taxes/fees.
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Julie, 21 May 2008 @ 6:29am

The City is not double-collecting on tax. The first time a ticket is sold, they will collect tax on it. When it is resold, they will collect tax on the markup only.
Read the article here
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- Anonymous Coward, 21 May 2008 @ 7:15am
  
  Re:
  If you sell the ticket at a loss, does the city pay you the proportional difference?
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Crosbie Fitch (profile), 21 May 2008 @ 6:31am

Use an auction instead
A better solution is not to sell tickets in the first place, but to hold an auction for all the seats/spaces, or better still to create an online market and let all comers (including the venue and event organisers) buy and sell as many times as they want.
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Overcast, 21 May 2008 @ 6:40am

Or an even better answer is to just not buy them. Every time I'm even interested in a show - they are sold out to these scalpers and such - and the tickets are far too much.

I haven't bought tickets to a game or a concert in probably 15 years - and most likely will not ever again. I like going - but they are just far too expensive now.

So they can keep the tickets and I'll keep the money I would have paid in taxes.
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- eBuck, 21 May 2008 @ 7:39am
  
  Re:
  15 years are you serious.... that is not living my friend.
  Regardless of price to not have bought tickets to something in 15 years is a bit extreme.
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  - Nasch, 22 May 2008 @ 3:37pm
    
    Re: Re:
    I'm sure there are plenty of people who live their entire lives without ever having enough discretionary money to buy tickets to a live event. And I'm just talking about the richest country in the world. Just a little perspective...
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Dolf, 21 May 2008 @ 7:07am

Amusement Tax?
What a crock of BS. How does that saying go..? Oh right, 'no taxation without representation.' Something tells me the people of Chicago are not being represented in any way.
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DKP, 21 May 2008 @ 7:11am

resale
Some events are Requiring the pickup of the tikets at the door that night to eliminate the large number of sales online and the outragus prices
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sonofdot, 21 May 2008 @ 7:19am

Every city does this
Every city in the US (and probably on the planet) goes to great lengths to tax each and every conceivable revenue stream, often to their own detriment.
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known coward, 22 May 2008 @ 12:10pm

on the bright side . . .
usually the tax authorities go after the little guy, at least this time it is a corporation that has the deep pockets to fight back.
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Notax, 23 May 2008 @ 9:45am

Just tax consumption
If you only tax consumption, guys who scalp would be discouraged from doing this... and we'd all pay less in taxes.
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