(CN) – StubHub does not have to pay amusement taxes to the city of Chicago on the tickets it resells, the Illinois Supreme Court ruled.
StubHub, which bills itself as “the world’s largest online ticket marketplace,” allows users to buy and sell tickets for various events in the United States.
In 2006, Chicago amended its amusement-tax ordinance to require “resellers’ agents” to collect the tax and remit it to the city.
StubHub failed to answer to the city’s request for information to determine if it was subject to the tax.
The city responded with a lawsuit in 2008 asking StubHub to pay taxes on any tickets it resold since 2000.
After successfully removing the case from state court, a federal judge ruled that the city lacked authority to collect the tax from StubHub.
But the 7th Circuit punted the city’s appeal to the state’s top court.
Writing on behalf of the unanimous court, Justice Mary Jane Theis cited the legislative history of Illinois’ Auction License Act to back the finding that cities cannot ask companies like StubHub to collect their taxes.
“The statutory scheme, and the debates which produced the act, evince an intent by the Legislature to allow Internet auction listing services to opt out of any obligation regarding local tax collection,” Theis wrote.