The Desert Sun, a newspaper in the city of Indo where the event is held, reported the news that 'organisers are seriously considering moving the festival out of the city.'
A potential 5-10% admissions tax on entertainment events which host to more than 2,500 people is being proposed in Indo.
Festival promoter Paul Tollett, president of Goldenvoice, said of the proposal: "If the tax initiative of putting $4 million to $6 million onto Coachella gets on the ballot we're going to take off 2014; 2015 we'll be at a new facility outside of Indio."
He added: "We think this tax is outrageous for all the things we've done with Indio."
Estimates suggest that Coachella generates more than $800,000 in ticket fees, tax revenue on $9 million in food and beverages sold, and a Transient Occupancy Tax of more than $800,000.
Source: Desert Sun