City Gets Fee Envy, Sues eBay And StubHub

By Marcus Gilmer in Arts & Entertainment on May 21, 2008 4:13PM

Because those Ticketmaster fees just aren't enough of a pain in the ass, the City of Chicago is suing websites eBay and StubHub, claiming that as "reseller agents," the sites are required to an amusement tax on sports and cultural events tickets sold on the sites under a Chicago ordinance. If the city succeeds, future purchases on these sites could see an additional tax of up to 8% tacked on to the price. The two websites have vowed to fight the lawsuit, issuing a joint statement:

"We do not believe that the City's Amusement Tax applies to either eBay's or StubHub's business models nor do we believe that the Amusement Tax can properly be assessed here. We intend to fight this litigation vigorously."

This, in spite of the city's ordinance which defines "reseller 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” and 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." StubHub collects 15% of a sale's total amount, while eBay's commission calculations are slightly more complicated.

While selling tickets on eBay is nothing new, StubHub has emerged over the last few years as a popular source for concert and sports tickets, helped by official partnerships with some of the sports leagues (i.e., Major League Baseball), thereby ensuring fans they won't be ripped off by bogus tickets. We've bought tickets from StubHub before and it was easy, painless, and affordable, thus making it ripe for city government interference. Because if there's one thing this city needs, it's more taxes. [Trib, S-T]