Daley defends Bears permanent seat license tax
Bears fans have made a killing by re-selling their permanent seat licences at Soldier Field — and Chicago taxpayers deserve a cut of the action, Mayor Daley said today.
Days after the Bears protested the tax grab and five fans filed a class-action lawsuit that seeks to block it, Daley defended the decision to retroactively apply Chicago’s 9 percent amusement tax to roughly 2,700 permanent seat license holders who obtained the licenses from the original owners but did not pay the tax.
“They’re flipping it,” Daley said of the owners who sold the licenses that give fans the right to then purchase season tickets.
“They start selling these licenses. . . . In other words, I bought it for $1,000. I sold it for $5,000. That’s all they’re doing. So, we caught ’em. . . . Some of ’em are just trying not to pay the tax.”
Bears season ticket-holders are furious about the city’s demand because they consider it double-taxation since the tax is already included in ticket prices. A 9 percent tax applied to a $10,000 PSL would cost the license holder $900.
The fans’ lawsuit also seeks to re-coup at least $10 million worth of amusement taxes paid when the licenses were originally sold to fans by the Bears.
That’s even though original owners paid a flat fee, wrote checks to the “Lakefront Improvement Fund” that financed the new Soldier Field and were never told about the amusement tax.
“Just because the city is hard up for money doesn’t mean they get to go back and make up the rules as they go along,” said Keith Hunt, the attorney who filed the class-action lawsuit.
“You only get to enter once. You only buy one ticket. They should only be able to collect one tax — not two. They don’t get to tax you on the way in and on the way out.”
Hunt noted that the amusement tax ordinance specifically describes the tax as a 9 percent fee on “charges paid for the privilege to enter” an entertainment event.
“A PSL does not give you the right to enter. It only gives you the right to buy tickets. If you go up to Soldier Field with your PSL agreement in your hand, they won’t let you in unless you also have a ticket,” he said.
Daley countered, “The permanent seat license is part of the total amount the purchaser pays for the privilege of . . . viewing an amusement.”
Desperate for revenue to erase a threatened $300 million year-end shortfall, the Daley administration asked, during an annual audit of the Bears’ books, for the names of all PSL “transferees” since 2004. A transferee is someone who either purchased or received a license from the original owner.
The renovation of Soldier Field was financed, in part, by the sale of the licenses. Seat licenses covered 45 percent of the stadium’s 62,000 seats and sold for anywhere from $900 to $10,000. Most have since tripled or quadrupled in value.
The city’s request infuriated the Bears and threatened to renew past tensions after both sides had acheived a fragile peace that paved the way for the team to end its 30-year quest for a new stadium early this decade.