Chicago Sues StarHub Over Local Ticket Tax

May 21, 2008 11:48 a.m. EST

Chicago, IL (AHN) - The city of Chicago is suing eBay, claiming the Internet auction company's ticket business StarHub does not collect taxes. In two lawsuits, the city asks a federal court to award damages for taxes the municipality missed.

The lawsuits are just the latest by cities alleging Internet companies owe local taxes for items sold online. In the most recent incident, Chicago charges the taxes are owed because eBay's StarHub has a physical location in the city.

Internet retail giant Amazon is now fighting similar lawsuits filed by New York and Texas. The U.S. Supreme Court has ruled municipalities can require online sites collect taxes if the companies have a local physical location.