Chicago’s onerous amusement tax is again being challenged in court, this time by a group of disgruntled Chicago Bears fans who are angry about having a levy imposed on their personal seat licenses (PSL).
Last month, city officials mailed letters to hundreds of Bears PSL owners, who bought PSLs from the original owners, stating that they owed the 8 percent amusement tax as part of the purchase. The original PSL owner paid the tax at the time of the initial purchase. The city, which, like other major U.S. cities, is struggling under the weight of the current economic downturn, and it stands to generate millions of dollars as a result of collecting the tax. It also wants to set a precedent because PSLs are often resold and the city wants to ensure that future PSL buyers also pay the tax.
In a class action lawsuit against the city filed recently by four PSL owners, attorneys for the plaintiffs claim the city can’t collect the tax because PSLs and tickets, the traditional focus of the amusement tax, are two different entities. PSLs only offer the right to purchase tickets, and they do “not confer any right to enter or attend any event,” nor do they represent “admission fees,” according to the lawsuit.
Also, because the city already collects the tax on tickets, collecting the tax on the PSL appears to constitute double taxation, the lawsuit claims. The city argues that it is not double taxing because the PSL is part of is being purchased as part of the amusement or game. It looks at the ticket and the PSL as one total entity.
Ed Walsh, spokesperson for the Chicago Department of Revenue, told TicketNews that the city suspended attempts to collect the tax, “as a courtesy to the court,” but he believes that the suspension will only be a temporary stoppage.
“We believe the tax applies, but we are currently waiting on the outcome of the proceedings,” Walsh said. StubHub won a battle against the city over the tax earlier this year.
Bears officials have met with representatives from the revenue department on behalf of season ticket holders, but other than the temporary suspension, the two sides continue to negotiate a resolution. The Bears are not part of the class action lawsuit.