Questions Generated from Meetings with various departments on November 4th, 6th, and 13th and answers
from Eric Wayne, Sales and Use Tax Director, at NCDOR
(1) Is the sales tax on admission charges only charged on admissions to “live events”? If so, what defines a live
event? I saw in one of your handouts, a picture of movie tickets.
Part V of Session Law 2013-316 provides the imposition language for admission charges subject to sales tax. A copy of
the enacted legislation is at the following link: http://www.ncleg.net/Sessions/2013/Bills/House/PDF/H998v8.pdf The
legislation provides , in part, "[a]dmission charges to the following entertainment activities are subject to tax:
a. A live performance or other live event of any kind.
b. A motion picture or film.
c. A museum, a cultural site, a garden, an exhibit, a show, or a similar attraction or a guided tour at any of these
attractions."
(2) Sometimes the Metropolitan Opera is shown on campus through a video and tickets are sold.
Is this considered taxable and a live event?
If the event is offered by the University and admissions are charged, such admission charges will be subject to
sales tax effective January 1, 2014.
(3) Are admissions to visual arts (art gallery) subject to the sales tax?
Without additional information, it would appear that an admission charge to an art gallery would be "a similar attraction"
and such admission charges would be subject to sales tax effective January 1, 2014 (see 1. c. above).
(4) Are events such as paintball, a haunted corn maze event, and water park tickets taxable?
The legislation does not provide a definition of "live event." A charge to participate in a paintball paint would be
considered a participatory sport similar to bowling, etc. and would not be subject to sales tax.
Corn mazes and waterparks - Admission to participate - not taxable; Admission to be a spectator - taxable.
(5) We sometimes have renters that pay us money to use our theatre for live performances.
Can you please confirm that they would be liable for collecting and remitting the tax and that we are in no way liable?
The imposition statute provides that the "retailer" is responsible. The imposition language also provides
"offering any of these listed activities is a service." Therefore, the "retailer" that "offers" the event would be
liable for the sales tax based on the language. However, there are a lot of factors that could implicate the
University as the retailer. Items such as who sells the tickets to the event in advance? Who collects and
deposits the admission charges? The definition of "retailer" also provides that the "[w]hen the Secretary finds
it necessary for the efficient administration of [the Sales Tax Article]," may regard persons as the
"retailer." This is an area that has surfaced that we have not resolved in total and to date have not reviewed
contracts.
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(6) If a third party is selling tickets to an event and we are selling tickets to the same event, are we both
responsible for collecting and remitting the sales tax? Would it be a good idea to eliminate split ticket sales?
If admission charges to a certain event are taxable, it makes no difference who sells admission tickets to an
event. Sales tax will be due on the admission charges. The person responsible for remittance of the sales tax on
admission charges is the "retailer" that "offers" the event. If you have a 3rd party selling tickets on behalf of
the school (for instance a visiting baseball team that sells tickets to the event held at UNCW), you will want to
make sure that either the sales tax is included in the sales price of the ticket or that the visiting baseball team is
aware that sales tax must be charged on the ticket sales to the event. I have not seen contacts relative to such
but have discussed this situation with another UNC campus.
(7) If we are selling VIP tickets for a theatre event and it includes the price of the performance and a
reception; would we tax the entire amount of just the sales price of the performance?
S.L. 2013-316 provides the following: "The general rate of tax applies to admission charges to an
entertainment activity listed in this subdivision. Offering any of these listed activities is a service. An
admission charge includes a charge for a single ticket, a multi-occasion ticket, a seasonal pass, an annual
pass, and a cover charge.
An admission charge does not include a charge for amenities.
(8) If a ticket is discounted, is the sales tax calculated on this price?
If the discount is offered by the seller, tax would be due on the admission charge after discount.
(9) I am assuming that if we are giving out complementary tickets to students, then no sales tax should be
charged. (since there is no sale) Is this correct?
Correct
(10) If the theatre department sells tickets to a performance to another department, would sales tax be
excluded? I am not sure why and how we would charge sales tax to ourselves.
The University is a single entity; transactions between departments do not constitute a sale or gross receipts.
No tax would be due.
(11) If the convenience charge is included in the cost of a ticket, is this amount subject to sales tax?
We have advised others that such charge is taxable as a part of the gross receipts for an admission charge.
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