CHICAGO (CN) – The 7th Circuit declined to overturn a ruling that would bars the city of Chicago from collecting tax on tickets resold online.
StubHub operates ticket auction websites, legally registered under Illinois law. Resellers can post tickets, frequently selling them for much greater than face value. The website collects a 15 percent commission from the seller and a 10 percent commission from the buyer. Though StubHub does not collect taxes, it notifies all users that they may have to pay taxes on their tickets.
In 2008, the city of Chicago filed suit against StubHub and eBay, which provides an almost identical auction service. “Chicago does not think that it would be worthwhile to pursue thousands of persons for a few dollars apiece; instead it wants StubHub! and similar services to collect and remit the taxes,” 7th Circuit Chief Judge Frank Easterbrook wrote in 2010 before asking the Illinois Supreme Court to determine if state law supports Chicago’s taxation plan.
On Oct. 6, the justices unanimously held that it did not.
Hoping to delay the 7th Circuit from issuing a final ruling, the city requested extra time to petition the Illinois Supreme Court for rehearing.
The tactic did not work.
“Chicago has not informed us … why it believes that there is even a tiny chance that the Supreme Court of Illinois will do a volte face on its unanimous opinion,” the federal appeals court ruled last week. “The request strikes us as pointless stalling. This litigation has been pending long enough.”
If the Illinois Supreme Court grants rehearing, Chicago will still be able to file postjudgment motions in federal court.