{"id":66154,"date":"2025-09-05T10:30:25","date_gmt":"2025-09-05T14:30:25","guid":{"rendered":"https:\/\/bridgemi.com\/?p=66154"},"modified":"2025-09-05T11:11:41","modified_gmt":"2025-09-05T15:11:41","slug":"a-detroit-ticket-tax-study-forecasts-millions-from-sports-entertainment","status":"publish","type":"post","link":"https:\/\/bridgemi.com\/urban-affairs\/a-detroit-ticket-tax-study-forecasts-millions-from-sports-entertainment\/","title":{"rendered":"A Detroit ticket tax? Study forecasts millions from sports, entertainment"},"content":{"rendered":"\n

Revenue from an event ticket tax could help Detroit cut property taxes and cover costs associated with hosting sports games and concerts. <\/p>\n\n\n\n

A new Citizens Research Council of Michigan study<\/a> found an admissions tax on Detroit sports and entertainment venues could raise between $14 million and $47 million annually, depending on the tax rate. The report states that events provide more than entertainment, \u201cthey are powerful economic engines,\u201d and Detroit is virtually alone among major cities in not tapping into the resource. The extra revenue could offset a property tax cut between 1.7 and 5.7 mills. <\/p>\n\n\n

\n
\"\"
Note: Best case scenario tax yield figures are represented in millions of dollars. (Source: Citizens Research Council of Michigan)<\/figcaption><\/figure>\n<\/div>\n\n\n

The 2025-26 budget<\/a> includes $1.6 billion in the General Fund, with estimated revenues<\/a> of  $466 million from income taxes and $165 million from property taxes. <\/p>\n\n\n\n

If Detroit adopted the highest tax rate considered in the study, it would generate just under 3% of total General Fund revenue. However, the estimated $47 million is more than the entire budget of some city departments.<\/p>\n\n\n\n

\u201cif you’re not going to come up with $50 million dollars, why are we doing this?\u201d said Eric Lupher, president of the Citizens Research Council. \u201cA higher percentage rate needs to be considered, or it’s probably not worth the effort.\u201d <\/p>\n\n\n\n

Lupher said the high-end estimate is more than what the city collects in utility taxes ($37 million), so the potential revenue from an arena tax is substantial. But Lupher said it\u2019s also important to recognize the limits of the tax in the context of the $3 billion overall budget. <\/p>\n\n\n\n

\u201cIt certainly funds some services and creates diversification that we think is important as part of the tax base, but it’s not going to fix the city’s problems,\u201d Lupher said. \u201cIt is helpful, but not a panacea. If some of that revenue were used for property tax relief \u2026 Detroit would still be a high property tax city. All tax relief is welcome tax relief, but this isn’t going to help the property tax property owners in the city get out from the heavy burden that they’re already paying.\u201d<\/p>\n\n\n\n

The city used to collect<\/a> a percentage of sales revenue from tickets, souvenirs, parking, concessions and suites from events at Joe Louis Arena. Detroit leased the now-demolished stadium and an adjacent parking facility to Olympia Development of Michigan and the Detroit Red Wings. This included a 10% ticket fee. <\/p>\n\n\n\n

\"aerial
Little Caesars Arena in downtown Detroit. Credit:<\/span> Shutterstock<\/span><\/figcaption><\/figure>\n\n\n\n

The fees were eliminated under a new deal when Little Caesars Arena was built, preventing Detroit from collecting revenue from events. The Downtown Development Authority owns the new facility and financed its construction with public bonds. Olympia has a rent-free lease and contributes $11.5 million each year to pay off the bonds, but keeps virtually all revenue from events. <\/p>\n\n\n\n

Thirty-four states have some form of admissions or amusement tax generally running from 3% to 10%. Nine peer cities were studied: Atlanta, Chicago, Cincinnati, Cleveland, Columbus, Denver, Indianapolis, Philadelphia and Pittsburgh.<\/p>\n\n\n\n

\"\"
(Source: Citizens Research Council of Michigan) <\/em><\/figcaption><\/figure>\n\n\n\n

Most cities implemented similar taxes in the last 50 years. Atlanta most recently implemented a 3% ticket tax in 2023 that includes venues of at least 9,500 people. The tax is used to bolster the public safety budget.<\/p>\n\n\n\n

Chicago\u2019s admissions tax dates back to 1947. Last year, Chicago raised $344 million in revenue by imposing a 9% tax on tickets, a 3% tax on admission fees, and a 10.25% tax on streaming services.<\/p>\n\n\n\n

Mayoral race spotlights local option taxes <\/strong><\/h2>\n\n\n\n

The City Council authorized<\/a> a $200,000 contract with the Citizens Research Council of Michigan earlier this year to examine the feasibility of local option taxes. Lupher said another report is coming on other kinds of \u201clocal option taxes\u201d that Detroit could use to lobby for changes in state law.  <\/p>\n\n\n\n

Council President and mayoral candidate Mary Sheffield previously said the report is a \u201cstart point\u201d for future conversations. Her office didn\u2019t immediately respond to a request for comment, and a spokesperson for her mayoral campaign declined to comment. <\/p>\n\n\n\n

Sheffield has cited the loss of revenue sharing at LCA, and the refusal of Olympia to provide a 2% ticket surcharge as replacement revenue, as key reasons she voted in 2023 against tax breaks for the Ilitch-family\u2019s latest District Detroit development project. <\/p>\n\n\n\n

Two years later, Sheffield has consistently promoted the idea of an arena tax and \u201chalf-penny\u201d sales tax as she runs for mayor. She said it\u2019s time to \u201dcapitalize on the economic opportunities that are happening in downtown Detroit.\u201d New taxes would allow a Sheffield administration to cut property taxes and diversify the city\u2019s revenue streams, she said. <\/p>\n\n\n\n

\u201cProperty tax reform is a focal point of what we’re trying to work on,\u201d Sheffield said at an Aug. 26 campaign town hall. \u201cIt’s going to take changes in state law for us to find additional revenue to offset a reduction, but it can be done.\u201d<\/p>\n\n\n\n

\"Solomon
Solomon Kinloch and Mary Sheffield will face each other in the mayor’s race in the November general election. Credit:<\/span> Malachi Barrett, BridgeDetroit<\/span><\/figcaption><\/figure>\n\n\n\n

Mayoral rival Rev. Solomon Kinloch Jr. said the promise to grow revenue through an entertainment tax \u201cmay sound good on paper, but won\u2019t impact the reality Detroiters are facing in their neighborhoods.\u201d <\/p>\n\n\n\n

\u201cWhether it\u2019s the inclusionary housing ordinance she promised would fix affordable housing or her championing of the People\u2019s Community Benefits Ordinance to give residents more input on publicly financed Downtown projects, the Council President has been consistent in one thing: delivering headlines without delivering progress for the residents of Detroit,\u201d Kinloch said in a Thursday statement.<\/p>\n\n\n\n

Kinloch said the next mayor needs to reexamine the city\u2019s entire tax structure, including the \u201cwidespread use of tax captures and abatements in the downtown core.\u201d He pledged to start examining whether the promises made to Detroiters in exchange for tax breaks have been kept in his first 100 days. <\/p>\n\n\n\n

Kinloch said \u201creal tax relief\u201d will come from ensuring that investment flows into neighborhoods to retain the middle-class and attract new residents and jobs.<\/p>\n\n\n\n

There\u2019s a long road to implementing an admissions tax. State lawmakers would need to first authorize municipalities to create local option taxes, then the City Council would need to exact an ordinance and a majority of Detroit voters would need to approve it.<\/p>\n\n\n\n

Sen. Mallory McMorrow<\/a>, D-Royal Oak, introduced a bill last November<\/a> that would have allowed cities to impose a \u201cticket enhancement fee\u201d of under $3 on tickets over $30. The bill did not receive a vote before the Legislative session ended. <\/p>\n\n\n\n

Kinloch noted the Legislature has shown no inclination to advance bills that create arena taxes. Similar legislation introduced in 2017<\/a>, 2018<\/a> and 2019<\/a> failed.  <\/p>\n\n\n\n

The CRC report argues other Michigan cities like Grand Rapids, Lansing, East Lansing, and Ann Arbor could take advantage of changes in state law to impose their own taxes on university sporting events and regional arenas.<\/p>\n\n\n\n

Detroit’s property tax burden is among the highest in the nation, leading to the use of selective tax break programs to lessen the burden on some residents. Income taxes are the primary revenue source for the city, creating three times as much revenue than property taxes. <\/p>\n\n\n\n

A 3% admissions tax would allow for a 1.7-mill property tax cut, while a 10% admissions tax would lower the property tax rate by 5.7 mills. <\/p>\n\n\n\n

Why charge more for pricey events?  <\/strong><\/h2>\n\n\n\n

The timing might be right for Detroit to start capitalizing more from its powerful sports and entertainment culture. <\/p>\n\n\n\n

Detroit is home to numerous concerts and events, all four major professional sports teams, an incoming Women\u2019s National Basketball Association franchise and a planned stadium for Detroit City FC to host games in the U.S. Soccer League. These events bring increased economic activity to the city but also puts pressure on public infrastructure, policing, sanitation and transportation services.<\/p>\n\n\n\n

Will higher ticket prices make it harder for residents to attend events? The report says the concern is valid, but data from cities with similar taxes show minimal impact on attendance. <\/p>\n\n\n\n

\u201cThere’s little evidence that attendance has gone down at sporting events or any of the other major events because of the tax,\u201d Lupher said. \u201cUnfortunately, it’s sort of a captive audience. If you want to see the Lions or Red Wings in person, your choice is to come to Ford Field or LCA or go see them on the road. And by the way, if you go see them on the road, then you’re going to pay some other city\u2019s entertainment tax.\u201d<\/p>\n\n\n\n

The report, authored by Lupher and University of Michigan Ph.D. candidate Keion Harris, found attendance at Atlanta Falcons football games increased the year after an admissions tax was implemented in 2023. <\/p>\n\n\n\n

\"\"
Lions fans at a Jan. 21, 2024, tailgate at Eastern Market. Credit: Quinn Banks<\/figcaption><\/figure>\n\n\n\n

Still, it asks city leaders to consider how raising ticket prices could discourage attendance and make Detroit less competitive for large events. A drop in admission could cause a decrease in venue staffing, impacting residents who depend on the jobs created when big events come to town. <\/p>\n\n\n\n

Detroit could make exemptions for nonprofits, educational institutions, events sponsored by the city and low-cost events in smaller venues. Detailed exemptions would protect smaller venues like bars and restaurants from an additional fee.<\/p>\n\n\n\n

The tax revenue ebbs and flows with the performance of Detroit’s sports teams, but it\u2019s not always aligned with wins on the field. <\/p>\n\n\n\n

The Detroit Lions had $33 million in ticket sales in the 2023-24 season when they hosted two playoff games and finished 12\u20135. The Lions had $61 million in ticket sales in 2019 when they lost 12 straight games and were eliminated from the playoffs before Thanksgiving. <\/p>\n\n\n\n

The Red Wings had traditionally had the most ticket sales revenue ($77 million) of the professional teams in 2023-24, followed by the Tigers ($65 million), Pistons ($43 million) and Lions ($33 million).<\/p>\n\n\n\n

Sporting events generated roughly $283 million in ticket revenue while entertainment venues generated roughly $185 million from ticket sales. Little Caesars Arena had the highest ticket sales, followed by Ford Field, the Fox Theatre, Fisher Theater and Masonic Temple. <\/p>\n\n\n\n

Lupher said the ticket sale estimates are based on publicly available data aggregators like Statista, Vivid Seats and Forbes. <\/p>\n\n\n\n

\u201cWe approached the teams to try to get their gate receipts for this exercise, and the common response is, they’re a private entity and since this is a tax on them, they’re not real big on sharing that information,\u201d Lupher said. <\/p>\n","protected":false},"excerpt":{"rendered":"

A new Citizens Research Council of Michigan study found an admissions tax on Detroit sports and entertainment venues could raise between $14 million and $47 million annually, depending on the tax rate. 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The Citizens Research Council, a nonpartisan, nonprofit research firm, has published an analysis of the city\u2019s fiscal structure and trends \u2014 Detroit City\u2026","rel":"","context":"In "Guest Commentary"","block_context":{"text":"Guest Commentary","link":"https:\/\/bridgemi.com\/category\/guest-commentary\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/bridgemi.com\/wp-content\/uploads\/2013\/04\/Chart_D-CRC-graphic-4-17-289x300.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":12192,"url":"https:\/\/bridgemi.com\/michigan-government\/pro-casino-claims-go-bit-too-far-finds-michigan-truth-squad\/","url_meta":{"origin":66154,"position":2},"title":"Pro-casino claims go a bit too far, finds the Michigan Truth Squad","author":"Bridge Staff","date":"July 17, 2012","format":false,"excerpt":"What: Citizens for More Michigan Jobs radio interview Who: Emily Palsrok, Citizens for More Michigan Jobs spokeswoman Truth Squad call: Technical foul Backers of a proposal to add eight private casinos in Michigan sell it as a jobs plan for the state. They promise up to 16,000 in construction and\u2026","rel":"","context":"In "Michigan Government"","block_context":{"text":"Michigan Government","link":"https:\/\/bridgemi.com\/category\/michigan-government\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/bridgemi.com\/wp-content\/uploads\/2012\/07\/Casino-pic-7-17.jpg?fit=350%2C206&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":3065,"url":"https:\/\/bridgemi.com\/business-watch\/detroit-oks-748m-tax-breaks-15b-downtown-redevelopment\/","url_meta":{"origin":66154,"position":3},"title":"Detroit OKs $748M in tax breaks for $1.5B downtown redevelopment","author":"Malachi Barrett","date":"March 29, 2023","format":false,"excerpt":"City Council made a series of key votes Tuesday to secure tax incentives for the $1.5 billion District Detroit development project.","rel":"","context":"In "Business Watch"","block_context":{"text":"Business Watch","link":"https:\/\/bridgemi.com\/category\/business-watch\/"},"img":{"alt_text":"Andrew Cantor at Detroit City Council meeting","src":"https:\/\/i0.wp.com\/bridgemi.com\/wp-content\/uploads\/2023\/03\/Andrew-Cantor.jpg?fit=1200%2C593&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/bridgemi.com\/wp-content\/uploads\/2023\/03\/Andrew-Cantor.jpg?fit=1200%2C593&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/bridgemi.com\/wp-content\/uploads\/2023\/03\/Andrew-Cantor.jpg?fit=1200%2C593&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/bridgemi.com\/wp-content\/uploads\/2023\/03\/Andrew-Cantor.jpg?fit=1200%2C593&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/bridgemi.com\/wp-content\/uploads\/2023\/03\/Andrew-Cantor.jpg?fit=1200%2C593&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":11712,"url":"https:\/\/bridgemi.com\/michigan-government\/handshake-deal-state-haunts-detroit\/","url_meta":{"origin":66154,"position":4},"title":"Handshake deal with state haunts Detroit","author":"David Ashenfelter","date":"March 15, 2013","format":false,"excerpt":"DEAL BREAKER: Fifteen years ago, the state and Detroit agreed on a funding scheme \u2013 a deal that Detroiters say the state soon broke, helping propel the city into its current fiscal crisis. 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