Controversial tax code threatens Chicago clubs

  • Published
    Mon, Aug 22, 2016, 18:30
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  • The county is going after dance venues for back taxes, saying their events don't qualify as live performances.
  • Controversial tax code threatens Chicago clubs image
  • Cook County, Illinois is attempting to collect outstanding taxes from a few Chicago clubs, saying that DJ events don't qualify for tax exemption. The county wants to collect hundreds of thousands of dollars in back taxes from a number of small venues, the Chicago Reader reported last week. These venues are currently exempt from paying a 3 percent tax on cover and ticket fee, because of a local code protecting "live theatrical, live musical or other live cultural performances." Now the county is aiming to strip the venues' tax exempt status, on the grounds that their events don't qualify as live music. They're trying to roll back a 2006 decision that classifies DJ gigs as live performances, as long as there's some performative element like "technical manipulation, singing, speaking, dancing or other activity." Among the businesses being targeted is the popular dance spot Beauty Bar, who would owe more than $200,000 for taxes stretching back at least six years. Beauty Bar representatives told the Chicago Reader that the county appears to be going after venues specializing in DJs and electronic music. Pat Doerr, president of the Hospitality Business Association of Chicago, said that during an administrative hearing, a Cook County officer also claimed that "rap, rock and grunge" shouldn't qualify for tax exemption on the grounds that they're not "fine art." He added that, while the likelihood of the county winning this battle is low, it may lead to a costly legal dispute that could drag on for years. And if the court does implement the changes to the tax code: "A bunch of venues will shutter—they'll go out of business." "These recent county audits take an exceptionally dated view of modern music and DJ performances," a spokesperson for Chicago venues smartbar and The Metro told RA over email. "This grave misunderstanding of DJ music's cultural importance as a fine art will probably be resolved in the venues' favor. But until then, this fight will divert venues' time and money from artist development and growing modern forms of music in and around Chicago."