Whether it’s attending a live concert, sporting event, movie screening, or even participating in a bar crawl, locals have an endless amount of amusement options – all at a cost.

Residents and visitors of the city of Chicago are all subjected to a 9% tax that encompasses “places where amusements are conducted,” according to the city’s official procedural definition of the tax. The tax was put in place in 1986 but increased to 9% in January 2018.  

The tax itself is calculated from charges already paid by the consumer and is enforced by any venue or event that has a maximum capacity of over 750 people. These venues include, but are not limited to, concert halls and auditoriums, sports events and social clubs, movies, tours and pub crawls. 

In 2015, Chicago expanded the tax to streaming services like Netflix, Disney+ and Spotify, becoming the first major city to do so. Despite legal objections, all the streamers – along with gaming companies like PlayStation, which stream games from a digital library – have been required to pay ever since. Per Bloomberg Law tax data, over $30 million was collected from the streaming giants in 2021.

Venues and operators that host these various forms of amusement are responsible for allocating the additional 9% tax revenue from their patrons, although they are not required to provide complete transparency as to what it encompasses. 

“The high ticket prices with extra fees have made it difficult for me to justify spending money on these events,” said DePaul freshman Kellen Siczka. “I’ve been more selective about shows I go to since coming to Chicago.”

According to the City of Chicago’s 2022 Budget Overview, the city’s amusement tax is a part of the recreational tax revenue, which includes — but is not limited to — places where amusements are conducted, liquor and tobacco purchases, cannabis, purchases of non-alcoholic beverages and coin-operated amusement devices such as pinball machines.

In other words, patrons are subjected to various taxes when choosing to have fun in the city, many of which tend to overlap. Many venues and events subjected to the amusement tax also collect additional tax revenue for the city, like the sale of alcoholic beverages. 

“The first time I saw it, I think I was just confused. I don’t think I’d ever heard of it, especially living in Missouri,” Alexis Broom said. “So when I came back, and I noticed that it had been on a couple of my receipts, I was just initially confused.” 

Broom, a Chicago native, works for the education nonprofit organization City Year. She didn’t have to deal with an amusement tax during her time in Missouri, and when she moved back she had to get reaccustomed to a Chicago lifestyle. 

“I knew that Chicago has a lot of taxes that a lot of other cities don’t have. So, I just chalked it up to that like, okay, it’s Chicago. I’m back in a big city again,” Broom said. 

Though Broom has dealt with the amusement tax residing in Chicago, it’s not only limited to Chicago. Cook County also has its own tax. 

Cook County charges an amusement tax of 1.0% of admission fees for live theatrical, musical or other cultural performances with capacity of 750 to 5,000 persons and a 1.5% tax for performances with capacity over 5,000 persons. Live performances in venues with capacity under 750 persons are exempt from the tax. A tax of 3.0% applies to other exhibitions, performances, presentations and shows, such as movies and sporting events. According to documents obtained through a Freedom of Information Act request, in 2022 Cook County collected over $37.5 million in amusement tax revenue.

According to The Civic Federation, an independent, nonpartisan government research organization, as of February 2016 the Cook County amusement tax applied to ticket resellers at the same rates listed above for any portion of the resold ticket price that exceeds what the seller paid for it.

The tax doesn’t apply to every entertainment business. Events like amateur productions, benefits for nonprofit organizations, nonprofit professional orchestras and operas or participatory activities can receive a waiver. 

The City of Chicago 2022 Budget Overview also stipulates that all recreational tax revenue is allocated to the corporate fund, defined as “the City’s general operating fund, supporting basic City operations and services, such as public safety, public health and community services.”

The city expected the recreational taxes to bring in $274.4 million in 2022, accounting for 5.6% of the General Corporate Fund, according to the budget overview.

According to documents from a Freedom of Information Act request filed to the City of Chicago Department of Finance, the total amusement tax revenue in 2022 was over $236.6 million.

The revenue will all be going to the corporate fund, which this year will be spent primarily on city employee wages, pension contributions, financial costs and contracts, according to the City of Chicago 2023 Budget Forecast. Overall, the recreation taxes are expected to make up 6.2% of the city’s $5 billion corporate fund in 2023.

Chicago residents are not always aware that this is where the amusement tax revenue goes.

“I would like to know what it currently goes to, because it doesn’t seem like anything that’s super helpful to the everyday person. It could be going to our streets, infrastructure and stuff like that, but I doubt it,” said Elronayn Israel. “It can’t be our schooling, because schools are still shutting down. Very underfunded, especially schools on the South Side. I basically have an idea of where it’s not going.” 

Israel works as a sales account manager for Angi Leads. He moved to Chicago in 2005 and has been a resident ever since. Although Israel loves the city and feels it’s one of the greatest places to live, he believes there’s still work to be done. 

“I think that it [the amusement tax] could be used extremely well to support underfunded communities and just disenfranchised people,” Israel said. “To be used towards education programs, trades and introducing trades to at-risk communities. I have a pretty extensive list of things that it could be used on, but I doubt it ever would.” 

Israel would appreciate more explanation regarding the amusement tax and other taxes in general from the city’s political leaders. He currently feels most of “the taxes and budgets go to the police” to place more officers on the street and upgrade their gear and vehicles. 

Although the amusement tax does make entertainment prices higher in Chicago, Chris Roberts, a DePaul professor in the School of Hospitality Leadership with a background in casino and hotel management, says it does not appear to stop consumers from attending events.

“Obscure concert ticket prices, for example, they’re so robust these days that the tax part of it usually doesn’t enter in a person deciding to buy the ticket, they look at the fact that the ticket’s $99 or $129 or something, and so the taxes boost it up even more, but it doesn’t seem to deter their decision to buy the ticket,” Roberts said.

Roberts explained that since the amusement tax applies equally to amusement-related businesses in Chicago, it doesn’t give any business an advantage or disadvantage over a competitor. Because of this the amusement tax generally doesn’t hurt local competition, but when businesses have to compete with other cities, it could be a deterrent. 

“What Chicago has to be careful of, what any city has to be careful of, is you get that [tax] too high, then all of a sudden your convention center business evaporates because convention centers draw a lot of hotel guests, and if our tax is too high, then they go to Nashville or Phoenix or some other city,” Roberts said.

For other businesses in Chicago like the new Bally’s casino, the amusement tax may have little effect. Roberts explained that since gambling at casinos is not taxable, the amusement tax would only apply to events at the casino like large-scale concerts, performances or events, which only make up a small part of casino revenue.

Exemptions to the tax also apply to live theatrical, musical or other cultural events that take place in venues with a capacity of less than 1,500. Other exemptions include events benefitting not-for-profits, activities that are primarily educational rather than recreational, initiation fees and memberships to health clubs.

One of the areas the city amusement tax does apply to is sports games, like the Bears at Soldier Field. On every ticket sold to a Bears game, the city applies the 9% tax, but if the Bears do make the proposed move to Arlington Heights, the city will no longer be able to collect this revenue.

A Chicago Bears game at Soldier Field. Photo by Zach Elliott.

Other major cities grapple with amusement and entertainment taxes, too. Each of the top five most-populous cities in the U.S. (New York, Los Angeles, Chicago, Houston, Philadelphia) are subject to some permutation of the tax. However, none of these major metropolitan cities matches Chicago’s 9% tax rate, with the closest being Houston at 8.25%.

Although people in Chicago are paying more for amusement, so far there haven’t been many calls for changes. Roberts explained that since taxpayers largely aren’t aware of the tax or that the revenue goes to the general fund, people can expect to continue to pay extra to enjoy themselves in the city.

Header Illustration by Julia Hester