Does a company owe Georgia sales tax on the fees it charges distributors to attend business training meetings, seminars, and conventions?

Plain-English summary

A company runs training and education events for the distributors of a multi-level marketing business: small invitation-only group meetings and "leader meetings" (a $5 door fee to cover room rental), one-day product trainings and larger seminars (tickets bought online), and big conventions of 2,000 to 15,000 attendees. It asked whether the charges for any of these events are subject to Georgia sales tax as "admissions."

The Georgia Department of Revenue ruled that none of the charges are taxable. Georgia does tax admissions -- sales of tickets, fees, or charges for admission to places of amusement, entertainment, exhibition, display, and athletic contests are specifically listed as taxable retail sales. But these events are different: attendees come to learn how to use products, hit sales goals, and build leadership, time-management, and business skills. The Department concluded the events are "akin to job training or continuing education conferences," not entertainment or exhibition admissions, so the charges are not the type Georgia taxes. That result applied equally to the small meetings, the trainings and seminars, and the conventions.

The ruling notes that the company separately sells products (books, training CDs) at conventions and already collects sales tax on those product sales -- those are distinct taxable transactions, separate from the non-taxable event charges.

What this means for you

Training providers and event organizers

Charging admission to an event does not automatically trigger Georgia sales tax. The dividing line is purpose: entertainment, amusement, and exhibition admissions are taxable, but genuine business-training and continuing-education events are not. Document the educational purpose and agenda -- the Department leaned on the fact that attendees came to build business and sales skills, not to be entertained.

Multi-level marketing and direct-sales companies

Fees you charge distributors to attend skill-building meetings, trainings, seminars, and conventions can fall outside Georgia's admissions tax. But keep product sales separate: books, CDs, apparel, and similar merchandise sold at the event remain taxable tangible personal property.

Accountants and tax professionals

The analysis turns on whether a charge is a taxable admission under O.C.G.A. § 48-8-2(31)(C)-(D) or an untaxed service. Services are taxable in Georgia only when specifically enumerated, and these educational events were not the amusement/entertainment/exhibition admissions the statute lists. Watch for events that blend entertainment with training -- the more entertainment-like, the more the admissions analysis could change.

Common questions

Q: Are event admission fees always taxable in Georgia?
A: No. Georgia taxes admissions to places of amusement, entertainment, exhibition, display, and athletic contests. Fees for genuine business-training or continuing-education events are treated differently and were found not taxable here.

Q: Why weren't the conventions taxable given how large they were?
A: Size did not matter; purpose did. The Department found the conventions were primarily for education and training -- improving sales, business, and leadership skills -- rather than entertainment, so the charges were not taxable admissions.

Q: Are products sold at the events taxable?
A: Yes. Books, training CDs, and similar merchandise sold at the events are taxable tangible personal property and are separate from the non-taxable event charges. The company already collected sales tax on those product sales.

Q: Can I rely on this ruling for my own events?
A: Not automatically. A Georgia letter ruling binds the Department only for the taxpayer and facts it was issued to, and no other taxpayer may rely on it. An event that mixes in entertainment could be analyzed differently.

Citations and references

Statutes:

• O.C.G.A. §§ 48-8-1, 48-8-2(31), 48-8-30 (imposition of sales/use tax; definition of "retail sale")
• O.C.G.A. § 48-8-2(31)(C), (D) (admissions to amusement/entertainment/exhibition/display/athletic contests, and charges for games and amusement activities, are taxable retail sales)
• O.C.G.A. § 48-8-3(22) (professional, insurance, and personal service transactions are not taxable)

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2020-03

Original ruling text

Georgia Letter Ruling: LR SUT-2020-03
Topic: Admissions
Date Issued: February 6, 2020
This letter is in response to your request for guidance on the application of Georgia sales and use tax to certain
charges by Taxpayer to potential and new independent business owners to attend certain meetings, seminars, and
conventions.
Facts Presented by Taxpayer
Taxpayer is an approved provider of training and education services for a multi-level marketing and distribution
company which sells through authorized individual distributors. Any individual can become a distributor upon
completion of the applicable training and provision of certain investment in product and educational materials.
Taxpayer organizes and operates various events to support educational and training needs of distributors. These
events help distributors develop characteristics to contribute to the success of their businesses. All events are
available by invitation only and are not open to the general public. Taxpayer has three main categories of events,
which are described in more detail below.
Small Group Meetings and Leader Meetings
Small Group Meetings with potential and new distributors in hotel meeting rooms to introduce them to the business,
describe what steps are needed to be successful, and discuss how long being profitable will take. The purpose of
these meetings is to introduce the company system, explain company policies, walk through application forms,
discuss how to use Taxpayer’s website, and provide next steps for new and potential members.
Leader Meetings are meetings held the night before a Seminar (defined below) in the same city or at the same
location as the Seminar. These meetings are meant for leaders to discuss their business successes and struggles,
strategic planning, motivation, and other experiences. No Taxpayer employees or independent contractors attend
these events.
A small fee of $5 is charged at the door for both Small Group Meetings and Leader Meetings to help cover the cost
of renting the space. No products are sold or provided during these events. Participants simply take notes in their
own notebooks.
Trainings and Seminars
Trainings are one-day courses that teach distributors how to use specific products and offer additional sales
techniques. These courses are purchased online, and no funds are collected at the door. Taxpayer arranges the
training location for the course, which is generally in a hotel. No products are sold or provided during the Trainings.
Seminars are similar to Trainings, except they are larger in capacity and cover topics related to improving and
managing an distributors business and sales. Tickets for the Seminars are purchased online in advance of the event
and cannot be purchased at the door. The distributors have the option, but are not required, to purchase books and
learning materials regarding the covered topics at the Seminar events and the locations for these events are arranged
by Taxpayer.
Conventions
Conventions are Taxpayer’s largest events. They are held approximately every four months and can have between
2,000 to 15,000 attendees per event. Tickets for the Conventions are sold by pre-sale at a Convention for the next
Convention, online, and at the door for the current Convention. Taxpayer employees sell products, such as books and
training CDs, at the event and collect sales tax on such product sales. These product sales occur in separate
transactions and are completely optional; they are not included in the fee for the Convention.

Georgia Letter Ruling: LR SUT-2020-03
Topic: Admissions
Date Issued: February 6, 2020
Page 2 of 2
The Conventions are focused primarily on tips and techniques for improving sales, business and time management,
skills needed to be successful in business, training to develop leadership skills, training and discussion on products,
and sharing of testimonials for motivational purposes. Taxpayer’s Conventions feature paid motivational speakers,
but no professional live entertainment is provided. Taxpayer considers the Conventions to be primarily for
educational and training purposes rather than for entertainment purposes.
Issues
1.
2.
3.

Are Taxpayer’s charges for Small Group Meetings and Leader Meetings subject to sales and use tax in
Georgia?
Are Taxpayer’s charges for Trainings and Seminars subject to sales and use tax in Georgia?
Are Taxpayer’s charges for Conventions subject to sales and use tax in Georgia?

Analysis
Georgia levies and imposes a tax (subject to certain specific exemptions) on the retail purchase, retail sale, storage,
use, or consumption of tangible personal property, certain enumerated services, and utilities. 1 “Retail sale” means
any sale, lease, or rental for any purpose other than for resale, sublease, or subrent. 2 Sales of tickets, fees, or charges
for admissions to places of amusement, entertainment, exhibition, display, and athletic contests and charges made
for participation in games and amusement activities are specifically enumerated as retail sales and, accordingly, are
subject to sales and use tax. 3
Sales of services are not subject to sales and use tax unless the service is specifically designated as taxable.
Professional, insurance, and personal service transactions are not taxable, even when such transactions involve a
non-itemized sale of tangible personal property as an inconsequential element. 4
In this case, Taxpayer coordinates events to provide attendees an understanding of its products and processes,
guidance on how to achieve sales goals, and guidance on how to improve leadership, time management, and
business skills and practices. Unlike customers purchasing tickets for an entertainment or exhibition event,
distributors attend Taxpayer’s event with the expectation of developing and advancing their business skills.
Therefore, the events are akin to job training or continuing education conferences, and Taxpayer’s charges for the
events do not appear to be the type of charges contemplated as taxable sales.
Ruling
1.
2.
3.

Taxpayer’s charges for Small Group Meetings and Leader Meetings are not subject to sales and use tax in
Georgia.
Taxpayer’s charges for Trainings and Seminars are not subject to sales and use tax in Georgia.
Taxpayer’s charges for Conventions are not subject to sales and use tax in Georgia.

The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances and taxpayer in question. The facts herein are those presented by the
taxpayer and the Department accepts them as true for this ruling. If the facts presented herein change, are not true,
are different, or material facts have been omitted, the conclusions reached in this ruling may change. In addition,
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 tax treatment than that expressed in this ruling.

O.C.G.A. §§ 48-8-1, 48-8-2(31), and 48-8-30.
O.C.G.A. § 48-8-2(31).
3
O.C.G.A. § 48-8-2(31)(C) and (D).
4
O.C.G.A. § 48-8-3(22).
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2