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City wants its cut from Stubhub, eBay tickets This article is about Chicago and Bears tickets but I think it can start up a nice discussion on taxation over the internet (since I have many questions). Well, here's the article: BY FRAN SPIELMAN AND STEVE PATTERSON Staff Reporters
In January, 2006, Rolling Stones fans coughed up as much as $1,500-a-ticket to watch Mick Jagger strut his stuff at the United Center.
They should have paid the city's 8 percent amusement tax -- $120 for a $1,500 -- just like everyone else who buys from a broker. But if they bought their tickets on the Internet, Chicago taxpayers got zilch.
Today, the Daley administration moved to close that legal loophole.
The city filed lawsuits against eBay and StubHub accusing the Internet ticket brokers of failing to collect amusement taxes on “thousands of tickets” to concerts, sporting and cultural events.
Law Department spokesperson Jennifer Hoyle said the city has no idea how much money is at stake since eBay and StubHub have refused to turn over their records. The city wants a Circuit Court judge to order a full accounting.
The lawsuits contend that eBay and StubHub are “resellers agents” and, therefore, are required to collect the amusement tax and fork it over to the city.
The 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 term applies “whether the ticket is re-sold by bidding, consignment or otherwise, and whether the ticket is re-sold in person, at a site on the Internet or otherwise,” the ordinance states.
The decision to sue ticket resellers who make a killing on the Internet but leave taxpayers in the lurch was telegraphed by the Daley administration in February, 2006.
That’s when a City Council committee held a hearing on the idea of going after eBay and StubHub.
At that time, Finance Committee Chairman Ald. Edward M. Burke (14th) estimated that as much as $16 million was slipping through the city’s fingers because of growing Internet purchases.
“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 million,” Burke said then.
“And if StubHub is 10 times the size of that broker, that’s $1.4 million. One day, StubHub had 882 tickets listed for a single Bears game with an uncollected city tax of $17,950.”
Three years ago, the Daley administration filed a lawsuit accusing more than a dozen online companies of not paying proper taxes on hotel rooms they secure at discount rates. The first thing I don't understand is how the state or city can go after double taxation. There was already an amusement tax when the tickets were sold the first time. How can they keep collecting more taxes on that same product? Maybe there's a simple answer to that... Second, why are they attacking eBay and Stubhub? They aren't selling the tickets, the sellers are. eBay is providing an online marketplace to sell all sorts of goods (event tickets, bowling balls, Browns merchandice and sea cow T-shirts). Are they suing eBay and Stubhub because they can't sue "SuperSeller1234" with as much ease? Third, a little unrealted to this story but under the taxation umbrella, how can websites like Amazon sell most of its goods tax free? I know this is BS but some dude told me I'll eventually have to pay the tax on my $500 camera I bought off Amazon once the US government sues Amazon for all the back taxes (like I said, I know that about impossible but at some point Uncle Sam is going to get wise and get their taxes). And fourth, do you shop on the internet to buy stuff tax free? I know I do.
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I hope, and believe, that the city will lose this one.
The location of the event is immaterial, the location of the sale is all they have jurisdiction over... and the last time I checked, Chicago is not located in the vast nothingness of the internet.
The city that those brokerages do business out of can collect a tax, but not Chicago.
Browns is the Browns
... there goes Joe Thomas, the best there ever was in this game.
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Quote:
I hope, and believe, that the city will lose this one.
The location of the event is immaterial, the location of the sale is all they have jurisdiction over... and the last time I checked, Chicago is not located in the vast nothingness of the internet.
The city that those brokerages do business out of can collect a tax, but not Chicago.
That pretty much sums it up.
It will take a act of Congress to change the policy, just as a act of Congress created it.
If everybody had like minds, we would never learn. GM Strong ![[Linked Image]](http://www.dawgtalkers.net/uploads/small-gator-chomp.gif)
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Quote:
Third, a little unrealted to this story but under the taxation umbrella, how can websites like Amazon sell most of its goods tax free? I know this is BS but some dude told me I'll eventually have to pay the tax on my $500 camera I bought off Amazon once the US government sues Amazon for all the back taxes (like I said, I know that about impossible but at some point Uncle Sam is going to get wise and get their taxes).
And fourth, do you shop on the internet to buy stuff tax free? I know I do.
technically you are supposed to pay "use tax" to the state of ohio on all of the items that you buy from out of state vendors if no sales tax was added to the price. this would relate mostly to catalog or internet purchases. i know when i file my taxes turbotax asks me if i made any out-of-state purchases for this reason. check out this info from ohio department of taxation related to use tax. http://tax.ohio.gov/faqs/content/sales_and_use/qa03.asp
i would think that for most people the amount of use tax that would be owed is minimal, but with the growing use of the internet to shop online it would not surprise me at all to see this becoming a bigger and bigger issue. one of the reasons it's an issue (aside from losing out on state revenue) is that it's not really fair to vendors in ohio that you paid $500 for the camera online, when you would have had to pay them $540 (w/ 8% sales tax) for the same camera if you bought it in the store. if you don't pay the $40 use tax, it puts them at a disadvantage since they are required to collect sales tax whereas an internet vendor is not, even if they sell goods for the same price.
just something to think about the next time you purchase something online "tax-free". at least in ohio, it's really not.
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This is kind of residual from the late 90's tech boom. A lot of people were able to get high paying jobs then, and as a result, cities and states were able to generate a lot of tax revenue. But then the cities and states immediately plugged that money into programs, pensions and other expenditures. Now that salaries have come back down to earth, governments still have the budget of a booming economy, but the income of an average one. Rather than slash the budget to match the income ... they are just finding creative ways to tax people and businesses. 
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Quote:
Third, a little unrealted to this story but under the taxation umbrella, how can websites like Amazon sell most of its goods tax free? I know this is BS but some dude told me I'll eventually have to pay the tax on my $500 camera I bought off Amazon once the US government sues Amazon for all the back taxes (like I said, I know that about impossible but at some point Uncle Sam is going to get wise and get their taxes).
And fourth, do you shop on the internet to buy stuff tax free? I know I do.
On your state taxes there is an area for Ohio "Use Tax" so you can "voluntarily"  pay your sales tax. I do see more and more non-Ohio sites charging sales tax,. I think that states are starting to work together so if someone buys something from state "X" based website, they charge sales tax and reciprocate with the buyers state; like RITA muni-taxes here around Cleveland and surrounding areas.
I still do buy looking at taxes and shipping (and handling) charges. I'm seeing more and more "Free shipping" and then they tack on $8-10 in "handling" just to box the stupid thing.
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On a side note....I think Chicago already has a whopping 9% sales tax. What is interesting about this is as gas prices rise, I bet more cities raise their sales taxes a tick knowing that people won't leave the muni area since it would still cost more in gas. I hate taxes. 
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Yes, we have a very high sales tax rate (and the highest gas prices in the country to boot!). Ok, I didn't know there was an option on your state return to pay for the sales tax on internet purchases. Even so, how realistic is that option? Heck, most people "cheat" on their tax returns as is. Is there some type of federal legislation that can force other states to charge a sales tax of the buyers state to the transaction? I think that would solve the tax problem but...I wouldn't like it  .
“...Iguodala to Curry, back to Iguodala, up for the layup! Oh! Blocked by James! LeBron James with the rejection!”
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Quote:
Is there some type of federal legislation that can force other states to charge a sales tax of the buyers state to the transaction? I think that would solve the tax problem but...I wouldn't like it .
Don't they do that with cars and other major purchases? I can't go to another state with lower sales tax and buy a car to save money...they base it on my address.
#gmstrong #gmlapdance
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Quote:
Yes, we have a very high sales tax rate (and the highest gas prices in the country to boot!).
Ok, I didn't know there was an option on your state return to pay for the sales tax on internet purchases. Even so, how realistic is that option? Heck, most people "cheat" on their tax returns as is.
I was speaking for Ohio in that we have the place to claim the tax. As for an option to paying it, that's why I winked . 
Quote:
Is there some type of federal legislation that can force other states to charge a sales tax of the buyers state to the transaction? I think that would solve the tax problem but...I wouldn't like it .
I don't think there is federal legislation due to the burden put on businesses dealing with the states differences, but there are states out there that are trying to (might have done already) put something together with each other...
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Um, stubhub and ebay are resale tickets, so whoever bought the ticket originally paid the 8% tax, am I not correct?
We don't have to agree with each other, to respect each others opinion.
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Quote:
Um, stubhub and ebay are resale tickets, so whoever bought the ticket originally paid the 8% tax, am I not correct?
Yes they do...and now the gangster mayor wants more.
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Again, that doesn't seem to matter. You have to pay sales tax on used cars you buy. And, technically, you're supposed to charge sales tax at garage sales. Go figure.
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But they aren't talking about an amusement tax, not sales tax?
We don't have to agree with each other, to respect each others opinion.
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Yes, it's an amusement tax. The ticket brokers located in the state have to pay the tax (for the ticket sales they chose to report). Still, it sure seems like double taxation to me and Chicago is going after the wrong people. Now if Uncle Sam could only figure a legit way to tax prostitution, marijuana, online gambling and allowances we give our kids for daily chores they'd be able to fix every pothole and still have some leftover to take a chunk out of the national debt........or so they want us to believe.
“...Iguodala to Curry, back to Iguodala, up for the layup! Oh! Blocked by James! LeBron James with the rejection!”
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If they just took the taxes we paid now, and used them wisely, they could accomplish all those things as well. 
We don't have to agree with each other, to respect each others opinion.
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Quote:
If they just took the taxes we paid now, and used them wisely, they could accomplish all those things as well.
Then who is going to pay for the lap dances and booze?
“...Iguodala to Curry, back to Iguodala, up for the layup! Oh! Blocked by James! LeBron James with the rejection!”
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Quote:
Quote:
If they just took the taxes we paid now, and used them wisely, they could accomplish all those things as well.
Then who is going to pay for the lap dances and booze?
We would have plenty left to make them public employees, and then everyone can enjoy them free of charge.
We don't have to agree with each other, to respect each others opinion.
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Quote:
Don't they do that with cars and other major purchases? I can't go to another state with lower sales tax and buy a car to save money...they base it on my address.
Not sure how that works but a lot of states have a property tax to register the vehicle in that state so Ohio is going to get theirs one way or the other in that case.
yebat' Putin
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Here's another example government's attempt at hurting businesses... http://news.yahoo.com/s/nm/20080531/wr_nm/overstock_newyork_dc_1NEW YORK (Reuters) - Overstock.com said on Friday it filed a lawsuit to challenge a New York law requiring Internet retailers to collect and pay New York state taxes on sales to New York consumers even if the retailer does not have a physical presence in New York. The online retailer said it named the New York State Department of Taxation and Finance, tax commissioner Robert Menga and Gov. David Paterson as defendants in the complaint filed with the New York Supreme Court. Overstock.com, which follows Amazon.com Inc in challenging the law, said it is asking the court for an injunction and to declare the law unconstitutional. The company, which is based in Utah, said that on May 15 it told more than 3,400 New York-based affiliate advertisers that as of June 1 they could not provide advertising for Overstock.com because of the new law, which comes into effect at that time. The law would require it to collect up to 8.75 percent sales tax on all its sales to New York customers, it said. ------------------ Go figure...NY....gotta love them tax freaks.
Last edited by I_Rogue; 06/02/08 01:35 PM.
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Forums DawgTalk Tailgate Forum City wants its cut from Stubhub,
eBay tickets
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