You Call That ‘Fine Art?’

County officials have demanded hundreds of thousands in back taxes from small Chicago venues, claiming that the rap, country and electronic music the clubs play do not qualify them for tax exemptions.

Cook County, which collects a 3 percent amusement tax on music, sports and other live entertainment, exempts venues that host “fine arts” performances for fewer than 750 attendees. The essential debate that took shape in a Chicago courtroom Aug. 22 was whether the music played in the clubs Evil Olive and Beauty Bar, which are below the size limit, met the definition of “cultural performances” intended for exemption in the tax code.

The clubs received letters from the county in 2015 claiming that $198,000 was owed in back taxes, interest, and penalties. Both businesses said the payment would be crippling. Victor David Giron, chief financial officer for 16” on Center, which owns Beauty Bar, told the Chicago Reader that simply introducing the tax moving forward would be almost insurmountable for the small club. The judge presiding over the case, Anita Richardson, indicated that the onus was on the clubs to prove that the entertainment the clubs provide constitutes “fine arts.”

Cook County Commissioner John Fritchey told the Chicago Tribune he intends to rewrite the county’s policy to more closely match that of the city, which ruled in 2006 to clearly fit electronic and country music into the umbrella of exempt performances. He acknowledged that this change would not affect the county’s current claim on back taxes though. The subject has been a longtime focus of the county.

In 2014 the Chicago Bears paid $4.1 million for club seats and luxury suite tickets it had not been paying, and in 2007 a state court tossed out the county’s claim for amusement taxes from a strip club. The next court session for the case is set for Oct. 17.