City wants its 8% cut of online ticket resales

Chicago Sun Times ^ | February 8, 2006 | FRAN SPIELMAN

[george76]

Chief Assistant Corporation Counsel Wes Hanscom told a City Council panel that City Hall is preparing to sue ticket resellers who make a killing on the Internet but leave taxpayers in the lurch.

The crackdown can't come soon enough for Finance Committee Chairman Edward M. Burke (14th).

He believes that as much as $16 million in amusement taxes is slipping through the city's fingers because of growing Internet purchases.

$4.2 mil. loss on Sox postseason?

"One registered ticket broker paid $140,000 in amusement tax on White Sox postseason.

EBay, it is estimated, is 20 times the size of that broker. That's $2.8 million...

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," the alderman said.

Last fall, 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.

On Tuesday, Burke made it clear he's not prepared to wait the years it will take for the hotel and ticket-broker lawsuits to make their way through the courts.

[T.Smith]

Let me see if I understand this correctly; somebody buys the tickets and pays a tax on them. Then, they turn around and resell the tickets and the city wants to tax them again. Am I correct, or do I not understand the process?

[Sometimes A River]

Government never ever has anough of your money.

You owe them.

[Tanniker Smith]

A sale is a sale and a sales tax is a sales tax ... unless it's on the Internet. (However, if it's an in-state transaction, I believe it can still be taxed legally.)

Of course, in New York, we just call this scalping.

[Abathar]

Isn't Stubhub a ticket reseller? Doesn't he have to pay the initial tax up front, then sells the tickets at a premium (scalped) prices to buyers later. So if I read this right the initial tax isn't good enough, they want the scalpers to give them the 8% on top of the 8% they already received in the initial sale.

Greedy b@stards

[ManORight]

Isn't that kind of like turning their ticket tax into a VAT?

[Lokibob]

You have it right. greedy gov't.

What I don't understand is how you can get a hotel room to sell on the internet without paying taxes on it.

[G.Mason]

" ... City Hall is preparing to sue ticket resellers who make a killing on the Internet but leave taxpayers in the lurch."

Perhaps voting these parasites out of office isn't enough.

Perhaps we should start hanging them in public. Tax free, of course.

[NJ_gent]

"Let me see if I understand this correctly; somebody buys the tickets and pays a tax on them. Then, they turn around and resell the tickets and the city wants to tax them again. Am I correct, or do I not understand the process?"

You're just not thinking like a government man. You see, the ticket broker is entertained by their job of selling the tickets. So really, not only should the broker be taxed when they buy the tickets and the end user taxed when they buy the tickets; the broker should be taxed again when they sell the tickets. That goes on top of sales taxes, which are levied on purchases made with money left over from income taxes, often used for purchasing items subject to import taxes, transported by vehicles paying gas taxes, and produced by companies paying corporate taxes.

When you think about the number of times any given dollar gets taxed as its path through purchasing is traced, it's truly staggering. One wonders how anyone affords anything at all.

[Abathar]

"On Tuesday, Burke made it clear he's not prepared to wait the years it will take for the hotel and ticket-broker lawsuits to make their way through the courts."

I thought the President used this logic with terrorist phonecalls and there are people who want to impeach him for it now...

[Plutarch]

They've never gone after this scofflaw:

[NJ_gent]

"Perhaps we should start hanging them in public. Tax free, of course."

Even then, you'd be paying sales tax on the rope and income tax to the state and Federal governments on the money used to buy the rope.

[george76]

Chicago...never has enough of your money.

They lost millions of sales tax money per year when they denied Walmart a store location.

[ManORight]

Like you could vote the Democrats out of office in Chicago.

[Lokibob]

Scalping tix in utah is legal.

[hayseed]

Sounds like the City of OKC. They charge you a
$5 permit to hold a garage sale and send you a tax remittance form to collect tax on your sales.

[Lokibob]

Unbelieveable!!!

[ManORight]

"We simply don't have the luxury in this economy to pass up any opportunity to collect what is due and owing to hard-pressed taxpayers," Burke said.

Burke cares about the "hard-pressed taxpayers" like Hillary cares about the children (that aren't aborted).

[G.Mason]

POP!

Ya had to wake me up, right? ;)

[armydoc]

Let me see if I understand this correctly; somebody buys the tickets and pays a tax on them. Then, they turn around and resell the tickets and the city wants to tax them again. Am I correct, or do I not understand the process?

I don't think that's correct. I believe the "first" consumer is obligated to pay sales taxes, and subsequent resales are exempt. If you declare yourself a distributor or merchant, I believe you are sales tax exempt but then must collect sales tax when you sell the goods. At Sam's Club, you can declare yourself a merchant, fill out a form, and avoid sales taxes on the goods you buy if you are going to resell them. You aren't obligated to collect sales tax when you resell your car or any other item you own, are you?