Were fees charged to play in bridge games taxable when spectators could watch without paying admission?

Plain-English summary

The Florida Department of Revenue concluded that the fees charged to participate in these bridge games were taxable admissions.

Members and nonmembers paid only if they played, while anyone could enter to watch and socialize without charge. Florida's rule taxes participation fees when spectators are not charged admission.

The ruling says the result would reverse if spectators paid a taxable admission: the separate participation fee would then be exempt. It also notes that a local organization needs its own qualifying nonprofit status rather than assuming the status of a broader membership organization.

What this means for you

Game and recreation organizers

Tax treatment depends on who pays to enter and who pays to participate. Document spectator and player charges separately.

Membership organizations

Do not assume an affiliate's nonprofit status automatically applies to a local branch. Keep the local determination letter if claiming the nonprofit-admissions exemption.

Accountants and tax professionals

Apply the participation-fee rule together with any separately established nonprofit exemption.

Common questions

Q: Did spectators pay admission?
A: No.

Q: Were player fees taxable?
A: Yes.

Q: Would player fees be exempt if spectators paid taxable admission?
A: Yes.

Citations and references

• Fla. Stat. §§ 212.02(1), 212.04, 212.04(2)(a)2., and 213.22
• Fla. Admin. Code r. 12A-1.005(3)(j)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 16A-004

Original ruling text

Executive Director
Marshall Stranburg

QUESTION: WHETHER PARTICIPATION FEES CHARGED TO MEMBERS OR NON-MEMBERS,
TO PARTICIPATE IN A BRIDGE GAME, ARE TAXABLE?
ANSWER: THE PARTICIPATION FEE CHARGED TO PLAY IN THE BRIDGE GAMES ARE
TAXABLE, AS PROVIDED IN S. 212.02(1), F.S., WHEN ONLY THOSE WISHING TO
PARTICIPATE IN THE BRIDGE GAMES ARE CHARGED A FEE AND NO CHARGE IS MADE TO
THE SPECTATORS. HAD THE SPECTATORS BEEN CHARGED A TAXABLE ADMISSION TO
VIEW THE BRIDGE GAMES, THE PARTICIPATION FEES TO PLAY WOULD BE EXEMPT. SEE
RULE 12A-1.005(3)(J), F.A.C.
March 3, 2016
Re:

Technical Assistance Advisement 16A-004
Sales and Use Tax- Admissions
Section: 212.02; 212.04, Florida Statutes (F.S.)
Rules: 12A-1.005, Florida Administrative Code (F.A.C.)
XXXX (“Taxpayer”)
FEI: XXXX

Dear XXXX:
This letter is a response to your petition received on XXXX, for the Department’s issuance of a
Technical Assistance Advisement (“TAA”) concerning the above referenced party and matter.
Your petition has been carefully examined and the Department finds it to be in compliance with
the requisite criteria set forth in Chapter 12-11, F.A.C. This response to your request constitutes
a TAA and is issued to you under the authority of s. 213.22, F.S.
Requested Advisement
Whether participation fees charged to members or non-members, to participate in a Bridge game,
are taxable?
Facts
Your letter provides the following in part:
…The transaction in question is the payment of a fee by a person wishing to participate
in an American Contract Bridge League (“ACBL”) sanctioned Bridge game offered at the
XXXX. This is located on the second floor of an office building and everyone is allowed
Child Support – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Dr. Maurice Gogarty, Director  Information Services – Damu Kuttikrishnan, Director

http://dor.myflorida.com/dor/
Florida Department of Revenue
Tallahassee, Florida 32399-0100

Technical Assistance Advisement
Page 2
entry to watch the activities and socialize with the members. The fee of $6.00 ($8.00 for
non XXXX members) is only charged to those who wish to play in the game scheduled
for that day and time. Those wishing to play sit at designated tables with up to four
persons per table. A table fees form is completed by those participating listing the names
of the players and their position at the table. …The person running the game collects the
fee and form from each table upon the start of the game. The only awards for playing are
“ACBL master points” given to those whose performance ranks in the top 40% of those
playing. … The determination we are asserting is that our receipts are exempt from sales
tax. The reason being that “admissions are taxable but a fee to play is exempt.” …
Law and Discussion
The determination of whether a participation fee is taxable or tax exempt depends on a variety of
factors, namely whether the participants are charged a fee or a fee is charged to spectators for
admissions or whether both spectators and participants are charged admission to the event. In
addition, the taxability of fees paid and admission charges also depends on whether the
membership organization is for profit or not-for-profit.
Section 212.04(l)(a), F.S., indicates, “. . . [it is] the legislative intent that every person is
exercising a taxable privilege who sells or receives anything of value by way of admissions.”
Section 212.02(1), F.S., provides in part:
The term “admissions” means and includes the net sum of money after deduction of any
federal taxes for admitting a person or vehicle or persons to any place of amusement,
sport, or recreation … or any place where charge is made by way of sale of tickets, …
participation fees, entrance fees, or other fees or receipts of anything of value measured
on an admission or entrance ….
Rule 12A-1.005(3)(j), F.A.C. provides in part:
Charges made for the privilege of entering or engaging in any kind of activity for which
no admission charge is made to spectators are subject to tax. When spectators are charged
a taxable admission to a game, … or recreational event, the participation or entrance fees
are exempt. …
Section 212.04(2)(a)2., F.S., provides a specific exemption on admission charges imposed by
not-for-profit sponsoring organizations. To receive this exemption, the sponsoring organization
must qualify as a not-for-profit entity under s. 501(c)(3) of the Internal Revenue Code.
In this case, the ACBL is a not-for-profit membership organization for bridge players throughout
North America, Mexico, and Bermuda, however, XXXX is a local branch of the ACBL, which
does not necessarily make XXXX a tax exempt entity. In order to qualify as a not-for-profit
entity, XXXX should have a letter of determination from the Internal Revenue Service (“IRS”)
verifying that it qualifies as tax exempt under the Internal Revenue Code (“IRC”).

Technical Assistance Advisement
Page 3
In addition, when contacted by the Department regarding its request for advisement, Taxpayer’s
representative stated that anyone is allowed entry into the XXXX to watch the bridge games and
there is no admission charge. However, the XXXX does charge a participation fee of $6.00 for
members ($8.00 for non XXXX members) who wish to play in the bridge game scheduled for
that day and time. When asked if the XXXX was a not-for-profit entity, Taxpayer’s
representative stated that the center did not currently hold that classification.
Sponsoring not-for-profit organizations qualifying as a 501(c)(3) of the Internal Revenue Code
(I.R.C.) receive an exemption on admission charges. See s. 212.04(2)(a)2., F.S. Since XXXX is
not a not-for-profit entity, under s. 501(c)(3), IRC, and charges a fee for participating in its
bridge game but does not charge an admission fee to spectators, the participation fees collected
are subject to tax.
Conclusion
The participation fee charged to play in the bridge games are taxable, as provided in s. 212.02(1),
F.S., since this is a situation where only those wishing to participate in the Bridge game are
charged a fee and no charge is made to the spectators. Had the spectators been charged a taxable
admission to view the bridge games, the participation fees to play would be exempt. See Rule
12A-1.005(3)(j), F.A.C.
This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is
binding on the department only under the facts and circumstances described in the request for
this advice, as specified in s. 213.22, F.S. Our response is predicated upon those facts and the
specific situation summarized above. You are advised that subsequent statutory or
administrative rule changes or judicial interpretations of the statutes or rules upon which this
advice is based may subject similar future transactions to a different treatment from that which is
expressed in this response.
You are further advised that this response, your request and related backup documents are public
records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions
of s. 213.22, F.S. Confidential information must be deleted before public disclosure. In an effort
to protect confidentiality, we request you provide the undersigned with an edited copy of your
request for Technical Assistance Advisement, the backup material and this response, deleting
names, addresses and any other details which might lead to identification of the taxpayer. Your
response should be received by the Department within 15 days of the date of this letter.
Sincerely,
Taylor Hikes
Senior Attorney
Technical Assistance and Dispute Resolution
(850) 717-7756

Control #208611