SAN JOSE, Calif. – The city of Chicago is suing eBay and its subsidiary StubHub for failing to collect city amusement taxes on concert and sporting event tickets sold through the Web sites.
Chicago’s amusement tax ordinance includes Internet sites that resell tickets, but eBay, which bought StubHub last year, says the 8 percent tax does not apply to it. It’s not clear how much money is at stake, but when the city first floated the idea of going after taxes for online sales in 2006, Ald. Edward Burke estimated the city could be losing $16 million a year in taxes on Internet-based sales by ticket resellers.
Burke, who asked for the initial hearings on the matter, said Tuesday the loss is likely higher now given the growth in e-commerce, so he’s passionate about getting the money where he thinks it belongs. "Sixteen million dollars can pay for a lot of police officers here," Burke said.
The city filed two complaints Monday, one against each company, asking eBay and StubHub to hand over records of sales in Illinois. "We don’t have enough information to give an estimate (of lost taxes), because of the lack of information from eBay and StubHub," said Chicago Law Department spokeswoman Jennifer Hoyle.
The city is engaged in similar lawsuits against online companies that secure discount hotel room rates, like Hotels.com, for not paying applicable taxes. Also, Texas said this month it is looking into whether it can collect sales taxes from Amazon.com Inc. The investigation was prompted by a legal dispute between the online retailer and New York. (AP)
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