Updated 02/01/12 – 2:59 p.m.
CHICAGO (CBS) — Cook County commissioners have approved a measure that will give them the final say in whether major entertainment events like Lollapalooza will get an exemption from the county’s amusement tax.
The popular and profitable Lollapalooza summer music event in Grant Park has never paid the county’s amusement tax.
But as WBBM Newsradio’s Mike Krauser reports, a measure sponsored by Cook County Commissioner Bridget Gainer (D-10th), that could soon change.
LISTEN: WBBM Newsradio’s Mike Krauser reports
Currently, Lollapalooza does not pay Cook County or the City of Chicago any amusement taxes on its tickets.
A measure approved by the County Board on Wednesday gives the board final authority to vote on any amusement tax exemption that would cost the county $150,000 or more in revenue. Until now, the county’s revenue director had the final say on such tax breaks.
Gainer said, when Lollapalooza first came to town, it made sense to give the festival a tax break because nothing like it had been tried here. But now, the event brings in $20 million. The tax break cost the county $350,000 last year.
“The county needs the money,” Gainer said. “I mean, when we look at what just the $350,000 could do from this amusement tax, that could hire 150 kids this summer to have a summer job – maybe their first experience with working. So this isn’t just some philosophical change. These are real things that have impacts on people’s lives.”
It is not as if Lollapalooza would be singled out in having to pay the tax, she said.
“When Dave Matthews came and he went down to the U.S. Steel site, which has zero amenities, he paid the full tax. When the Restaurant Association does their Chicago Gourmet in Millennium Park, they pay all the tax,” Gainer said. “So this is kind of an anomaly.”
Such events as the concert series at Wrigley Field and the Pitchfork Music Festival in Union Park also pay amusement taxes.
The tax break for Lollapalooza also costs the City of Chicago $1 million per year. WBEZ.org critic Jim DeRogatis said last year that Mayor Rahm Emanuel has also been considering a change that could send some money back to the city.
The original contract gave the tax exemption to Lollapalooza in exchange for the guarantee that it would stay in Chicago through the year 2018.
Lollapalooza is co-owned by Austin, Texas-based C3 Presents and William Morris Endeavor, the talent agency owned by the mayor’s brother, Ari Emanuel.
Lollapalooza began as an itinerant festival, but has been held only in Chicago since 2005.