Home > News > Chicago Sues E-commerce Sites Over Sales Tax • Bookmark   • Newsletters   • Register Search Options


Chicago Sues E-commerce Sites Over Sales Tax

Chicago Sues E-commerce Sites Over Sales Tax
Get XBIZ News
May 24, 2008 10:00 AM PDT    Text size: 
CHICAGO — While California's proposed 25 percent porn tax is causing the most buzz amongst adult website operators, other states, and even cities, are pursuing their own tax initiatives against all e-commerce websites — not just adult ones.

One recent example involves a lawsuit against online retail giant eBay and its StubHub subsidiary by the city of Chicago over allegations that StubHub failed to collect required amusement taxes imposed by the city on all concert and sporting event ticket sales.

The 8 percent city sales tax applies to Internet retailers as well as physical outlets, but eBay denies the local ordinance's applicability to its operation.

The city, however, is now demanding that eBay and StubHub provide records of tickets sales made to Illinois residents.

At stake is an estimated $16 million in annual taxes lost to Internet-based sales by ticket resellers.

"Sixteen million dollars can pay for a lot of police officers here," Alderman Edward Burke said.

Although StubHub maintains an office in Chicago, eBay disputes that it constitutes a "physical presence" for the company in that city.

But having a physical presence within the city does not seem to be a prerequisite to incurring local sales tax obligations, as Chicago is also pursing other e-commerce operators, such as discount travel sites that book hotel rooms within the city, over unremitted sales tax issues.

The National Conference of State Legislatures claims that billions of dollars in state tax revenues are being lost each year to out-of-state Internet retailers, and cites unfair competition for local merchants as another revenue drain.

The U.S. Supreme Court, however, has ruled that states could not require companies to collect sales taxes unless they have a physical presence in the state.

If upheld, such local taxation could pose endless problems for adult websites which are often run by smaller companies that might not endure the financial and logistical burdens of dealing with the countless municipalities that are out for a slice of the e-commerce pie.

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !


E-Stim Basics: Selling Customers on Powerboxes as Pleasure Tools

Electrosex is a commonly misunderstood pleasure practice for good reason: Most of us have negative associations with electricity; maybe we’ve been shocked after rubbing our feet across a carpeted... More »

Search Oftentimes Is Left to Chance

Adult content is frowned upon in search, whether in paid, organic or social. With the big algo updates from the past few years, Google has cleaned up search, trying to get rid of spammy and low-quality... More »

Five Tips to Generate Repeat Business

A $50 sale is great. But what if you could get that same $50 sale to come back four times in the next few months? Here are some ideas how to achieve that. 1) On your receipts, you should have an option... More »
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.

Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Subscribe to XBIZ Premiere magazine, the industry's leading adult retail trade publications, delivering the most timely and comprehensive business news and information to producers and retailers of adult products.


XBIZ 2017

Jan 09 - Jan 13
Hollywood, CA

XBIZ Awards 2017

Jan 12 - Jan 12
Los Angeles, CA

ANME Founders Show

Jan 14 - Jan 15
Los Angeles Marriott Burbank Airport

Everything To Do With Sex Show

Jan 20 - Jan 22
Montréal, Québec
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!