In general, admission charges to places of amusement are subject to sales tax. For sales tax purposes, amusement parks are places of amusement. Amusement parks have a number of different ways of charging for admission to the park and for the use of the rides and other facilities at the park. Depending on how your amusement park operates and your method of charging for admission, special rules may apply.
A charge for admission to an amusement park that only allows customers to enter the park, and does not allow them on the rides, is a charge for admission to a place of amusement for sales tax purposes. The full amount of this kind of admission charge is subject to sales tax.
In some parks, admission is free and customers need to pay only to go on the rides. A separate charge solely to ride amusement rides is not a charge subject to sales tax. Therefore, if a customer purchases an individual ride ticket to go on a single ride, or a combination ticket or wristband that allows the customer to go on all or most of the rides, the charge is not subject to sales tax.
Except at a qualifying place of amusement as described below, a "pay-one-price" admission that allows customers to enter the park and to ride all or most of the rides is fully subject to sales tax unless all of the following conditions are met:
- At all times, the amusement park sells both a pay-one-price ticket and an admission-only ticket, each of which shows on its face the charge for the ticket;
- The pay-one-price ticket also separately states on its face the portion of the charge for the use of the rides and the portion of the charge for admission;
- The admission-only ticket does not allow a customer to use the rides;
- The admission charge to enter the park shown on the pay-one-price ticket is the same as the charge shown on the admission-only ticket; and the availability of both types of tickets, and the charges for each type, are conspicuously displayed at every entrance to the park, on the amusement park's Web sites, and in all advertisements, signs, and brochures that contain information about admission policies and charges; and a customer can readily purchase either an admission-only ticket or a pay-one-price ticket.
If all of the above conditions are met, then the portion of the pay-one-price ticket that separately states the charge for use of the rides is not subject to sales tax, while the remainder of the pay-one-price ticket is subject to sales tax.
Example: An amusement park sells a $10.00 admission-only (no rides) ticket that limits the customer to admission to the park. The park also sells a $25.00 pay-one-price ticket, which separately shows a $15.00 charge for the use of the rides and a $10.00 charge for admission. The availability of both types of tickets is clearly communicated to all customers, and either ticket can readily be purchased. The $15.00 charge on the pay-one-price ticket for use of the rides is exempt from sales tax.
Qualifying place of amusement?
Some amusement parks do not sell admission-only tickets and the charge for entering the amusement park and the charge for going on the rides are combined in the price that customers pay when entering the park. An admission charge to this type of amusement park is subject to sales tax on the entire amount unless the park is a qualifying place of amusement. If a park is a qualifying place of amusement, the sales tax is computed on 25% of the total admission charge.
An amusement park is a qualifying place of amusement if it meets all four of these conditions:
- The amusement park is at the same location year-round, even though it may not be open year-round.
- The combined admission charge allows customers to ride at least 75% of the rides, at no additional charge.
- The combined area of the amusement rides equals at least 50% of the entire area of the amusement park. When figuring the entire area of the amusement park, don't include parking lots, hotels, picnic areas, campgrounds, lakes, administrative areas, woodlands, and undeveloped areas in the park.
- Each person who buys an admission to the park also gets a paper ticket or receipt showing the amount of the admission charge the person paid and the amount of sales tax that is due.
Example: A qualifying place of amusement sells a $30 ticket entitling a customer to both admission to the amusement park and use of the rides within the park. The amusement park must collect sales tax on $7.50 (25% of the $30 charge for the ticket) and it must give the customers a ticket showing the admission charge and the tax due.
An amusement park that doesn't meet the four conditions above doesn't qualify for this tax treatment.
To sell any taxable product you are required to obtain certificate of authority or complete sales tax registration to avoid paying penalties to the state.
Caution!
Before making any taxable sales please make sure that you have completed sales tax registration or have obtained and properly displayed one of the following at your location to avoid to be penalized by the authorized agencies.
- Reseller permit
- Sales tax vendor id number
- Sales tax registration
- Reseller tax id
- Sales tax permit
- Reseller certificate and
- Sales tax exemption certificate
- Certificate of authority
- Sales tax ID number
- State tax ID number
