Friday, November 20, 2009


One of the commonly taxed services is admissions. Many states don't tax these, and others do. And the ones that do have a wide variety of approaches:

Admissions to entertainment events as a spectator: movies, concerts, baseball games, culture, music festivals, etc. If you pay money to get in, and it's entertaining (or it's supposed to be entertaining) then it might be taxed.

Admissions to training activities: in other words, events that aren't supposed to be entertaining at all. This type of tax is much rarer. But it's there in a few states.This is why you'll never see doing a seminar in Connecticut. I just don't want to have to collect sales tax on the seminar fees that Connecticut imposes. Sorry CT folks.

Charges for participation: greens fees at the golf course, charges to participate in a marathon, health club fees, etc. These are not quite as commonly taxed as admissions charges for spectators, but they are taxed.

Club memberships: health club memberships, as well as country clubs and golf clubs. These types of organizations may not have fees for individual activities, but the purpose of the membership fee is to buy access and more or less unlimited activity. And country club folks are wealthier, so they're easier targets. ;-)

There are exemptions too.

Amazingly enough, most states that have had a Superbowl, or want to have a Superbowl, will also have an exemption for Superbowl admissions, assuming there was a tax in the first place.

Non-profit organizations are often off the hook for charging tax on their tickets for school plays and concerts, festivals and carnivals, etc.

Ditto for sales of admissions by government agencies, particularly schools and universities, and government owned stadiums.

And there are catches

For example, there was a case, years ago, when a music festival was selling admission tickets which included two beverages. The admission itself wasn't taxable in this particular state because it was being sold by a non-profit organization, but the state argued that the beverages included in the price should have been taxed (even when sold by a non-profit). Since the price of the beverages wasn't separately stated and taxed on the ticket, the state nicked this non-profit music festival for sales tax on the entire admission fee (this is an example of the bundling rule). The assessment was over $100, 000 in taxes, interest and penalties.

Sales Tax Guy

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