In a recent decision, a Wisconsin appeals court reversed a lower court, ruling that StubHub, Inc. (“StubHub”) is liable for sales tax on ticket sales made on its online platform between 2008 and 2013. StubHub, Inc. v. Wisc. Dep’t of Rev., App. No. 2024AP455 (Wis. Ct. App. Jan. 13, 2026). In its ruling, the Court disregarded statutory construction principles and improperly retroactively applied a marketplace provider law enacted in 2019.
The Facts: StubHub operates an online marketplace where tickets to sporting events, concerts, theater, and other live entertainment events are bought and sold. Ticketholders list tickets by identifying the event, entering ticket details, and setting the price. Tickets remain available unless withdrawn by the ticketholder or purchased by a buyer. Notably, StubHub itself never purchases tickets to sell on its own behalf or to hold for future sales.
When a sale occurred, the ticket buyer paid the ticketholder’s listing price plus StubHub’s fees, which consisted of a percentage of the sale plus a logistics fee. StubHub collected payments from buyers, deducted its fees, and remitted the remainder to the ticketholder. StubHub’s revenue came from its collected fees.
From 2008 to 2013, nearly $154 million in ticket sales occurred through StubHub’s platform for events in Wisconsin. While there was no record evidence as to what, if any, sales tax ticketholders paid on the original purchase of tickets later sold on StubHub, the parties stipulated it was “highly likely” that tax was paid on the original ticket purchases. Notably, the Court did not analyze whether imposing tax on resales would result in multiple taxation of the same ticket—a concern with meaningful economic implications given that the same ticket could theoretically be resold multiple times.
Following an audit, the Department of Revenue (“DOR”) assessed taxes, interest, penalties, and fees.
The Law: Wisconsin imposes a five-percent tax upon “all persons selling” admissions to amusement, athletic, entertainment, or recreational events or places. Wis. Stat. § 77.52(2)(a)2.a. The statute defines a seller generally as “every person selling.” Wis. Stat. § 77.51(17). A “sale” is defined as “the transfer of the ownership of, title to, possession of, or enjoyment of tangible personal property … or services for use or consumption[.]” Wis. Stat. § 77.51(14).
Wisconsin’s “Marketplace Provider Law,” enacted in 2019, added definitions for “marketplace provider” and “marketplace seller.” Under that law, a marketplace provider who facilitates retail sales by listing or advertising property and processing payments is liable for sales tax on the entire sales price. Wis. Stat. § 77.52(3m)(a). StubHub did not dispute that it is currently subject to tax under the Marketplace Provider Law.
Finally, Wisconsin law imposes penalties for failure to file required returns, but only where the DOR establishes that the taxpayer acted with “willful neglect” rather than reasonable cause. Wis. Stat. §§ 77.60(4); 73.16(4).
The Decision: The Court concluded that StubHub is a “person selling” within the meaning of the sales tax statute because StubHub “effected the sale by transferring the tickets in exchange for payment.” The Court emphasized that StubHub was the only entity the buyer encountered, processed the transaction, charged the buyer’s payment, deducted fees, transferred proceeds to the ticketholder, and provided delivery instructions. Because StubHub “effected the actual transfer of the tickets sold on its website in exchange for payment,” the Court found StubHub to be a seller. The Court’s decision, however, appears to be internally inconsistent. The Court acknowledged that the “ticketholders” who list the tickets for sale are the ones “who sold tickets on StubHub’s website” and that StubHub “never bought tickets to sell on its own behalf or to hold for future sales.” This raises two critical questions: (i) how both the ticketholders and StubHub could simultaneously be sellers in the same transaction (the decision does not address whether ticketholders are sellers); and (ii) how StubHub, which never owned tickets, could be deemed to have sold them.
The Court rejected StubHub’s characterization of itself as a passive facilitator comparable to an auctioneer. While acknowledging the “circularity” in statutory definitions (see Wis. Stat. § 77.51(17), defining “seller” as “every person selling”) and the principle that ambiguous tax statutes should be resolved in favor of the taxpayer, the Court nevertheless subjected StubHub to tax, appearing to depart from this established maxim.
The Court also rejected StubHub’s argument that the 2019 Marketplace Provider Law demonstrated it was not previously subject to tax, finding instead that the law was merely a “clarification” rather than a substantive change. When a law makes substantive changes, the presumption is against retroactive application. Legislative enactments are presumed to change the law.
Finally, the Court reinstated the 25 percent failure to pay penalty, concluding that the DOR’s published guidance should have made clear to StubHub that it was subject to sales tax. This aspect of the decision is particularly concerning because tax bulletins constitute guidance, not binding law. The lower court had reasonably concluded that StubHub was not subject to tax, and even the Wisconsin Tax Appeals Commission in its initial decision in the matter in favor of the DOR, which the lower court reversed, declined to apply penalties.
The Takeaways: Taxing authorities frequently characterize legislative changes as mere “clarifications” to justify retroactive application. Taxpayers should be prepared to challenge such characterizations when a substantive change in law has occurred. Taxpayers should monitor published interpretations and consider requesting rulings where possible when the risks of noncompliance are high, even where they disagree with the agency’s position. We hope the appeal will right this wrong.
This update is one in a series of updates written for the February 2026 edition of The BR State + Local Tax Spotlight.
© 2026 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reprint. Notice: The purpose of this update is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This update should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.