Legal Issues

by Mike Masnick

Filed Under:
chicago, events, taxes

ebay, stubhub

Chicago Wants To Double-Collect Taxes On Event Ticket Sales

from the pay-more-taxes dept

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.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    sachin, May 21st, 2008 @ 12:28am


    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.

    reply to this | link to this | view in thread ]

  2. identicon
    doug, May 21st, 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.

    reply to this | link to this | view in thread ]

  3. identicon
    Nate, May 21st, 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.

    reply to this | link to this | view in thread ]

  4. identicon
    Lucretious, May 21st, 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.

    reply to this | link to this | view in thread ]

  5. icon
    Killer_Tofu (profile), May 21st, 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.

    reply to this | link to this | view in thread ]

  6. identicon
    Brandon, May 21st, 2008 @ 5:41am


    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?

    reply to this | link to this | view in thread ]

  7. identicon
    Bryan, May 21st, 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.

    reply to this | link to this | view in thread ]

  8. identicon
    Greg, May 21st, 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.

    reply to this | link to this | view in thread ]

  9. identicon
    Julie, May 21st, 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

    reply to this | link to this | view in thread ]

  10. identicon
    Chuck Norris' Enemy (deceased), May 21st, 2008 @ 6:30am


    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.

    reply to this | link to this | view in thread ]

  11. icon
    Crosbie Fitch (profile), May 21st, 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.

    reply to this | link to this | view in thread ]

  12. identicon
    Overcast, May 21st, 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.

    reply to this | link to this | view in thread ]

  13. identicon
    Dolf, May 21st, 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.

    reply to this | link to this | view in thread ]

  14. identicon
    DKP, May 21st, 2008 @ 7:11am


    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

    reply to this | link to this | view in thread ]

  15. identicon
    Anonymous Coward, May 21st, 2008 @ 7:15am


    If you sell the ticket at a loss, does the city pay you the proportional difference?

    reply to this | link to this | view in thread ]

  16. identicon
    sonofdot, May 21st, 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.

    reply to this | link to this | view in thread ]

  17. identicon
    eBuck, May 21st, 2008 @ 7:39am


    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.

    reply to this | link to this | view in thread ]

  18. identicon
    known coward, May 22nd, 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.

    reply to this | link to this | view in thread ]

  19. identicon
    Nasch, May 22nd, 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...

    reply to this | link to this | view in thread ]

  20. identicon
    Notax, May 23rd, 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.

    reply to this | link to this | view in thread ]

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