IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

Admiral Theatre, Inc., 

 Plaintiff, 

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) 

) 

) 

) 

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v. ) 

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) 

No. 20-cv-4429 

Cook County Department of 

Revenue and City of Chicago 

Department of Finance, 

Defendants. 

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)

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Memorandum Opinion and Order 

 Plaintiff Admiral Theatre, Inc. (“Admiral”) operates a 

“gentlemen’s club” in Chicago that features live exotic dance 

performances. As a Chicago entertainment venue, Admiral is subject 

to amusement taxes imposed by both the city of Chicago and by Cook 

County. The city and the county exempt a number of venues and 

businesses from the amusement tax, including smaller venues that 

offer live theatrical performances, but explicitly do not exempt 

adult-entertainment facilities such as Admiral. In the instant 

action, Admiral asserts that the city and county amusement tax 

schemes violate the First Amendment of the United States 

Constitution and the free-speech protections of the Illinois 

Constitution because the exemptions are not content- or viewpointneutral. Defendants Cook County Department of Revenue and City of 

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Chicago Department of Finance have moved to dismiss the action. 

For the reasons that follow, the motions to dismiss [16, 20] are 

granted. 

I. 

 Under Section 4-156-020(A) of the Municipal Code of Chicago, 

the city of Chicago imposes an “amusement tax . . . upon the 

patrons of every amusement within the City.” An “amusement” is 

defined broadly as, inter alia, “any exhibition, performance, 

presentation or show for entertainment purposes.” Mun. Code of 

Chi. § 4-156-010. The tax rate is set at “nine percent of the 

admission fees or other charges paid for the privilege to enter, 

to witness, to view or to participate in such amusement.” Id.

§ 4-156-020(A). 

The Municipal Code of Chicago exempts several types of events 

from the amusement tax. Relevant here, it exempts “the admission 

fees to witness in person live theatrical, live musical or other 

live cultural performances that take place in any auditorium, 

theater or other space in the city whose maximum capacity . . . is 

not more than 1500 persons.” Id. § 4-156-020(D)(1). A “live 

theatrical, live musical or other live cultural performance” is 

defined as “a live performance in any of the disciplines which are 

commonly regarded as part of the fine arts” and explicitly “does 

not include such amusements as . . . performances conducted at 

adult entertainment cabarets.” Id. § 4-156-010. 

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Cook County, for its part, imposes a substantially similar 

tax on amusements taking place within the county, except that it 

imposes a tax rate of 3% rather than 9%. See Cook Cnty., Ill. 

Code of Ordinances § 74-392(a). It exempts from the amusement tax 

“in person, live theatrical, live musical or other live cultural 

performances that take place in any auditorium, theater or other 

space in the County, whose maximum capacity . . . is not more than 

750 persons,” where the performances in question are defined to 

exclude “performances conducted at adult entertainment cabarets.” 

Id. §§ 74-391, 74-392(d)(1). 

 The Admiral Theater, an adult cabaret located in Chicago, is 

subject to both the Chicago and Cook County amusement taxes. 

Although it is a small venue—it can hold no more than 250 patrons—

it is not subject to the exemptions for small “live theatrical . 

. . performances” because both the city and the county have 

excluded adult-entertainment cabarets such as Admiral. 

 Recently, both Chicago and Cook County audited Admiral’s 

amusement-tax payments. ECF No. 1 ¶ 25. Interpreting certain 

categories of Admiral’s proceeds as subject to the amusement tax 

over and above what Admiral had been paying, the city and county 

assessed more than $3 million in amusement taxes. Id. 

 Admiral now brings the instant action asserting that the city 

and county tax schemes violate the First Amendment and the 

analogous provisions of the Illinois Constitution. Admiral seeks 

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three forms of relief: (1) a declaratory judgment that the tax 

schemes are unconstitutional, (2) an injunction preventing the 

city and county “from enforcing their respective amusement tax 

ordinances against . . . Admiral,” and (3) “the refund of monies 

paid by . . . Admiral . . . under the[] . . . amusement tax 

ordinances.” Id. at 11-12. 

II. 

 Defendants argue initially that Admiral’s claims are barred 

by the Tax Injunction Act (“TIA”), 28 U.S.C. § 1341. The TIA 

provides that “[t]he district courts shall not enjoin, suspend or 

restrain the assessment, levy or collection of any tax under State 

law where a plain, speedy and efficient remedy may be had in the 

courts of such State.” 28 U.S.C. § 1341. The TIA divests district 

courts of subject-matter jurisdiction “if the relief sought would 

diminish or encumber state tax revenue,” and precludes federal 

plaintiffs from “seeking not only injunctive but also declaratory 

relief from state taxes.” Scott Air Force Base Props. v. Cnty. of 

St. Clair, 548 F.3d 516, 520 (7th Cir. 2008).1 “[T]he TIA’s ambit 

is not confined by the law under which a state tax is challenged, 

for even federal constitutional claims do not render the Act 

inapplicable.” Id. 

 

1 “The Tax Injunction Act does not bar federal monetary relief.” 

Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc., 651 

F.3d 722, 735 (7th Cir. 2011). Accordingly, the TIA does not bear 

on Admiral’s claims for damages. 

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 As its plain language makes clear, the TIA’s jurisdictional 

bar “is conditioned upon the availability of a ‘plain, speedy and 

efficient remedy’ in state court.” Id. at 521 (citing California 

v. Grace Brethren Church, 457 U.S. 393, 411 (1982)). A “plain, 

speedy and efficient” remedy is one that meets “certain minimal 

procedural criteria”; that is, it must “provide[] the taxpayer 

with a ‘full hearing and judicial determination’ at which she may 

raise any and all constitutional objections to the tax.” Grace 

Brethren Church, 457 U.S. at 411 (emphasis in original). “A 

plaintiff who seeks to surmount the jurisdictional bar of the TIA 

bears the burden of demonstrating the insufficiency of the remedy 

available in the state court system.” Scott, 548 F.3d at 521. 

 Admiral does not argue that it does not have a plain, speedy 

and efficient remedy in the state courts.2 Instead, it argues that 

the TIA bar is not triggered here under Hibbs v. Winn, 542 U.S. 88 

(2004). In Hibbs, Arizona taxpayers mounted an EstablishmentClause challenge to an income-tax credit. 542 U.S. at 94-95. The 

credit was afforded to citizens who made payments to non-profit 

 

2 Defendants contend, and Admiral does not refute, that Admiral 

has an avenue for state-court review of its constitutional claims 

through the Administrative Review Law, 735 Ill. Comp. Stat. § 5/3-

104, which provides that the Illinois Circuit Courts have 

jurisdiction to hear appeals of final administrative decisions. 

Admiral, Defendants argue, is empowered to seek administrative 

review of the tax assessment at issue, and then assert its 

constitutional arguments on appeal in state court. Indeed, it 

appears that Admiral has already availed itself of this remedy. 

See ECF No. 29-1 at 2; ECF No. 21 at 14. 

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organizations that were authorized to give money to religious 

private schools. Id. The taxpayer plaintiffs had not, themselves, 

taken advantage of the income-tax credit; accordingly, their own 

tax liability was not at issue. The Court held that the TIA did 

not apply. Id. at 94. It determined that “Congress wrote the 

[TIA] to address” only “cases in which state taxpayers seek 

federal-court orders enabling them to avoid paying taxes.” Id. at 

107. Because invalidating the tax credit would tend to increase, 

rather than diminish, state tax revenue, and further because the 

plaintiffs were third parties not seeking to avoid paying any 

personal taxes, the Court determined that the TIA did not present 

a jurisdictional bar. Id. 

 Admiral argues that, just like in Hibbs, the instant lawsuit 

“focuses not on the imposition of the tax on [Admiral], but the 

removal of tax liability for [favored artistic venues] and the 

resulting unconstitutionality of the tax scheme as a whole.” ECF 

No. 25 at 4. In other words, Admiral suggests that it is focused 

not on reducing tax liability for itself, but on increasing tax 

liability for those that qualify for the amusement tax exemptions. 

But that is belied by Admiral’s complaint. Admiral explicitly 

seeks to “enjoin [Defendants] from enforcing their respective 

amusement tax ordinances against Admiral Theatre.” ECF No. 1 at 

11 ¶ 2 (emphasis added). Similarly, it seeks “declaratory . . . 

relief against the enforcement of the . . . amusement tax 

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ordinances.” Id. at 11 ¶ 34 (emphasis added). Unlike the 

plaintiffs in Hibbs, Admiral seeks a federal court order that would 

reduce its own tax liability and deplete the state’s coffers—

precisely what the TIA was intended to prohibit. Accordingly, I 

conclude that Admiral’s claims for declaratory and injunctive 

relief are barred by the TIA. 

III. 

 Even if, contrary to the language in the complaint, Admiral 

truly seeks to increase the tax liability of competing venues 

rather than decrease liability for itself, Admiral’s declaratory 

and injunctive claims, together with its damages claims, are barred 

by the comity doctrine. “Out of respect for state functions, the 

comity doctrine ‘restrains federal courts from entertaining claims 

for relief that risk disrupting state tax administration.’” Perry 

v. Coles Cnty., 906 F.3d 583, 587 (7th Cir. 2018) (citing Levin v. 

Com. Energy, Inc., 560 U.S. 413, 417 (2010)). In particular, “the 

comity doctrine bars taxpayers from asserting § 1983 claims 

against ‘the validity of state tax systems’ via federal lawsuits.” 

Id. (citing Fair Assessment in Real Estate Ass’n, Inc. v. McNary, 

454 U.S. 100, 116 (1981)). Instead, taxpayers seeking such relief 

must “seek protection of their federal rights by state remedies, 

provided of course that those remedies are plain, adequate, and 

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complete.”3 Fair Assessment, 454 U.S. at 116. The comity doctrine 

was partially codified by the TIA, but “the comity doctrine is 

more embracive.” Levin, 560 U.S. at 424. 

 Admiral argues that the principles of comity do not apply 

here, pointing to language in Levin v. Commerce Energy, Inc., 560 

U.S. 413 (2010). Specifically, Admiral argues that the Levin court 

“limited the application of the comity doctrine” to exclude cases 

such as this one (1) that trigger heightened judicial scrutiny and 

(2) where the state court has already ruled on the constitutional 

questions. ECF No. 25 at 5. I disagree that Levin precludes 

application of the comity doctrine here. 

In Levin, independent marketers (“IMs”) of natural gas 

challenged under the Commerce and Equal Protection Clauses an Ohio 

tax scheme that afforded competing local distribution companies 

(“LDCs”) certain tax exemptions that the IMs did not receive. 

Levin, 560 U.S. at 418. The IMs sought declaratory and injunctive 

relief invalidating the tax exemptions with the purported aim of 

increasing tax liability for the LDCs, rather than decreasing tax 

liability for themselves. Id. at 419. The Court, looking to 

several factors, held that the comity doctrine blocked the suit. 

Id. at 431. First, the plaintiffs sought “federal-court review of 

 

3 The “plain, adequate, and complete” standard has been interpreted 

identically to the TIA’s “plain, speedy and efficient” test. See 

Fair Assessment, 454 U.S. at 116 n.8; Capra v. Cook Cnty. Bd. of 

Review, 733 F.3d 705, 714 (7th Cir. 2013). 

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commercial matters over which Ohio enjoys wide regulatory 

latitude; their suit d[id] not involve any fundamental right or 

classification that attracts heightened judicial scrutiny.” Id. 

Second, the Court found that although the plaintiffs held 

themselves out as third-party challengers to the tax scheme, they 

were “in fact seeking federal-court aid in an endeavor to improve 

their competitive position.” Id. Third, the court found that 

Ohio courts would be “better positioned” to correct any 

constitutional violations “because they are more familiar with 

state legislative preferences and because the TIA does not restrain 

their remedial options.” Id. at 431-32. With regard to this last 

factor, the Court explained that if the plaintiffs were to prevail 

on their suit, there were two ways to achieve parity between IMs 

and LDCs—first, a court could reduce the IM plaintiffs’ tax 

liability. Id. at 429. But that solution would run afoul of the 

TIA, which stands in the way of a decree that would “enjoin . . . 

collection of [a] tax under State law.” Id. (citing 28 U.S.C. 

§ 1341). The other avenue would be to “reshape the relevant 

provisions of Ohio’s tax code” to remove the exemptions for LDCs, 

but that would be “the very interference in state taxation the 

comity doctrine aims to avoid.” Id. Accordingly, the Court 

determined, the Ohio state courts were in the best position to 

resolve the action. 

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 For each the reasons articulated in Levin, comity 

considerations justify dismissal of the instant suit. Although 

Admiral has suggested that it aims not to decrease its own tax 

liability but to increase the liability for other venues subject 

to the exemptions, for the same reasons enunciated by the Court in 

Levin, that is a distinction without a difference; Admiral is “in 

fact seeking federal-court aid in an endeavor to improve [its] 

competitive position.” Id. at 431. And just like in Levin, 

Admiral’s relief could involve either invalidating the exemptions 

or reducing tax liability for Admiral, and the Illinois courts are 

better positioned to choose between those two options. 

 Admiral argues that unlike the plaintiffs in Levin, its FirstAmendment claims trigger heightened judicial scrutiny. I 

disagree. A grant of a tax exemption “has much the same effect as 

a cash grant” or subsidy, and “a legislature’s decision not to 

subsidize the exercise of a fundamental right does not infringe 

the right, and thus is not subject to strict scrutiny.” Regan v. 

Taxation with Representation of Wash., 461 U.S. 540, 544, 549 

(1997). “Defendants have chosen to . . . subsidiz[e] live fine 

arts performances in small venues, and they are entitled to define 

the parameters of that program in a way that will accomplish their 

goals.” Pooh-Bah Enters., Inc. v. Cnty. of Cook, 905 N.E.2d 781, 

802 (Ill. 2009) (upholding the tax scheme at issue here over FirstAmendment challenge); see also Davenport v. Wash. Educ. Ass’n, 551 

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U.S. 177, 188-89 (2007) (“[I]t is well established that the 

government can make content-based distinctions when it subsidizes 

speech.”). Accordingly, as in Levin, the claims at issue do not 

trigger heightened judicial scrutiny. 

 Admiral also argues that there is no need to defer to the 

state courts because the Illinois Supreme Court has already 

considered a First-Amendment challenge to the tax provisions at 

issue here and declined to disturb the scheme. See Pooh-Bah, 905 

N.E.2d at 805. But Admiral misunderstands comity’s purpose. The 

comity doctrine “reflects the reluctance of federal courts to 

‘interfere by injunction with [states’] fiscal operations’ and the 

concomitant desire to show ‘scrupulous regard for the rightful 

independence of state governments.’” Perry, 906 F.3d at 587-88 

(citing Matthews v. Rodgers, 284 U.S. 521, 525 (1932)). If I 

allowed the case to continue, I would risk “interfer[ing] . . . 

with [Illinois’s] fiscal operations” irrespective of whether the 

Illinois courts had already weighed in. See Z & R Cab, LLC v. 

Phila. Parking Auth., 616 F. App’x 527, 531 (3d Cir. 2015) 

(remanding to determine whether principles of comity barred § 1983 

action despite prior state-court decision declaring law at issue 

unconstitutional). Admiral also suggests that the Illinois 

decision would render a state-court action “futile,” but the comity 

doctrine requires only that “state courts are available to receive 

arguments and resolve disputes; that the federal plaintiff likely 

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would lose on the merits is neither here nor there.” See SGB Fin. 

Servs., Inc. v. Consol. Indianapolis-Marion Cnty., 235 F.3d 1036, 

1039 (7th Cir. 2000) (discussing analogous TIA context). 

Accordingly, I conclude that the comity doctrine bars the instant 

suit. 

 For the foregoing reasons, the motions to dismiss [16, 20] 

are granted. 

 ENTER ORDER: 

 ________________________ 

 Elaine E. Bucklo 

 United States District Judge 

Dated: April 15, 2021 

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