Eventbrite begins collecting 9% amusement tax on Chicago ticket sales

Eventbrite will comply with the expanded Chicago amusement tax, and begin collecting and remitting the 9% citywide tax May 2.

Those looking to spend an evening out in Chicago, and using Eventbrite to grab tickets, will see the city’s 9% amusement tax tacked onto their total.

Eventbrite, a popular event management and ticketing website, is set to begin collecting and remitting Chicago’s amusement tax beginning May 2. The tax will apply to all events located in Chicago that are published by the website starting May 2.

Eventbrite follows other online platforms in complying with the city amusement tax, which recently hit Sony PlayStation users as part of the “Netflix tax” expansion. Users of Disney’s new streaming service, Disney Plus, would likely to face the same tax.

While the city’s amusement tax originally applied to purchases of concert and sporting event tickets, the Chicago Department of Finance ruled in 2015 that the tax covered streaming services such as Netflix, Hulu and Spotify. This controversial expansion of the amusement tax is commonly dubbed the “Netflix tax” – and is likely illegal.

Following the 2015 expansion, the Liberty Justice Center, the Illinois Policy Institute’s litigation partner, sued on behalf of online streaming service customers to stop implementation of the expanded tax. The Center argued that the tax was illegal and unconstitutional under state and federal law. Federal law, namely the 1998 Internet Tax Freedom Act, prohibits states, counties and municipalities from levying taxes that discriminate against electronic commerce.

In Labell v. City of Chicago, a judge in May 2018 ruled in favor of the city, upholding the expansion of the amusement tax. Following the decision, the Liberty Justice Center appealed, and the case is pending before the First District Court of Appeals. Apple Inc. filed a new legal challenge against the city in August 2018, also on the grounds that the tax violates the Internet Tax Freedom Act.

Lawmakers in Springfield are attempting to expand Chicago’s “Netflix tax” statewide. House Bill 3359 would impose new taxes on satellite and video streaming service providers and subscribers. Users would pay a 1% tax “for the privilege to witness, view, or otherwise enjoy the entertainment.” The bill also seeks to tax streaming service providers at 5% of their gross revenues.

Chicago takes the top spot for taxes and fees in an analysis of the 15 largest cities. The City Council should be lowering Chicagoans’ tax burdens rather than finding creative ways to take more of their earnings.