8/12/2014 11:54:00 AM,
Jeff D. Gorman
(CN) - The Chicago Bears owe $4.1 million in delinquent taxes and interest, an Illinois appeals court ruled.
Though the NFL team paid Cook County's 3 percent amusement tax based on the value of a seat at a game at Soldier Field from 2002 to 2007, the Cook County Department of Revenue decided that the Bears had not included the value of amenities that go along with special seats at the game.
These amenities, available to holders of club seats, include parking passes and access to the climate-controlled club lounge at Soldier Field.
The lounge is open before and after the game, and it features exclusive food options and 144 high-definition flat-screen televisions broadcasting the Bears and other football games.
Club seats also include the right to purchase tickets to playoff games and nonfootball events at Soldier Field, as well as free programs and media guides.
The Bears additionally offer luxury seats above the club level that offer additional amenities such as food, beverages and private restrooms.
An administrative law judge agreed with the county revenue department and ruled that the Bears owed the county $4.1 million. The judge did not call a penalty on the Bears, however, ruling that their failure to pay the tax was not willful.
Though the Cook County Circuit Court reversed, a divided three-judge panel with the First District Illinois Court of Appeals reinstated the ALJ's opinion on Aug. 6.
"Fans who want to witness a Bears game from a club seat or luxury suite cannot get to a seat where they can watch the game without paying the price attendant to those seats," Justice Mary Anne Mason wrote for the majority. "Thus, it is impossible to separate these 'other charges' from the fee paid to enter the stadium."
The Bears failed to sway the court on its position that amenities constitute "non-amusement services."
"Since the luxury suite license agreements in the record aggregate the license holder's payment into a single, nondifferentiated annual fee, and the Bears adduced no evidence, other than the box office statements, that they internally assigned any portion of the license fee to nonamusement services, there is no basis in the record to exclude any portion of those fees from the tax," Mason wrote.
Justice Aurelia Pucinski wrote in dissent that the separate prices for the seats and the club amenities appear on the game ticket.
She also disagreed with the administrative law judge's decision to tax 60 percent of the luxury suite license fee.
"I agree that because the amount of the nonamusement charges is not separately stated, the entire amount of the luxury suite license fee is subject to the amusement tax," Pucinski wrote. "But it necessarily means that the ALJ's 60 percent tax determination on luxury suites must be reversed."