Are theatre membership fees subject to Kansas sales tax?

Plain-English summary

The Department addressed whether a theatre's membership fees are subject to Kansas sales tax. The short version: yes — a theatre membership is taxable dues under K.S.A. 79-3603(n) because it lets the member into the facility to view performances; only the specific memberships the statute names (including nonprofit zoo memberships) are exempt. The Department noted the reply "is an informational letter only and not a private letter ruling pursuant to K.A.R. 92-19-59."

The Department quoted the governing statute:

• Dues for recreation or entertainment are taxable (K.S.A. 79-3603(n)). The statute taxes "the gross receipts received from dues charged by public and private clubs, drinking establishments, organizations and business, payment of which entitles a member to use of facilities for recreation or entertainment," but not receipts from "(1) Dues charged by any organization exempt from property taxation pursuant to paragraphs Eighth and Ninth of K.S.A. 79-201 . . . and (2) sales of memberships in a nonprofit organization which is exempt from federal income taxation pursuant to section 501(c)(3) . . . and whose purpose is to support the operation of a nonprofit zoo . . . ."
• Theatre memberships are taxable. "The gross receipts received from the theatre memberships would be subject to the appropriate Kansas sales tax, since the respective memberships allow the member admission into the facility to view the performances."
• Only the listed memberships are exempt. "The non-profit zoo memberships are specifically exempt by statute. Therefore, in order for the theatre memberships to be exempt from Kansas sales tax, specific legislation would be needed."

What this means for you

Theatres and performance venues

If your membership entitles the holder to enter and view performances, treat the membership receipts as taxable dues under K.S.A. 79-3603(n) and collect Kansas sales tax on them.

Clubs and membership organizations generally

The tax attaches when dues buy access to facilities for recreation or entertainment. The exemptions are narrow: dues of organizations exempt from property tax under paragraphs Eighth and Ninth of K.S.A. 79-201, and memberships in a 501(c)(3) nonprofit that supports a nonprofit zoo. If you do not fit one of those, expect the dues to be taxable.

Nonprofit zoos

Memberships in a 501(c)(3) organization whose purpose is to support the operation of a nonprofit zoo are specifically exempt by statute — a carve-out other entertainment memberships do not share.

Common questions

Q: Are theatre membership fees taxable in Kansas?
A: Yes. Because the membership admits the member into the facility to view performances, the receipts are taxable dues under K.S.A. 79-3603(n).

Q: What memberships are exempt?
A: Dues of organizations exempt from property tax under paragraphs Eighth and Ninth of K.S.A. 79-201, and memberships in a 501(c)(3) nonprofit whose purpose is to support the operation of a nonprofit zoo.

Q: Could theatre memberships be made exempt?
A: Only through specific legislation. The Department cannot exempt them administratively; it would take a statutory change.

Citations and references

• K.S.A. 79-3603(n) — imposes Kansas sales tax on the gross receipts from dues charged by clubs, organizations, and businesses where payment entitles a member to use of facilities for recreation or entertainment; exempts only the dues and memberships specifically listed.
• K.S.A. 79-201 (paragraphs Eighth and Ninth) — the property tax exemption whose organizations' dues are excluded from the tax on dues under 79-3603(n).
• Section 501(c)(3) nonprofit zoo memberships — memberships in a 501(c)(3) organization whose purpose is to support the operation of a nonprofit zoo are specifically exempt by statute; theatre memberships are not.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: O-1998-07

Original ruling text

Opinion Letter

Body:

Office of Policy & Research

September 2, 1998

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Dear Mr. TTTTT:

We wish to acknowledge receipts of your letter dated August 12, 1998, regarding the application of Kansas Retailers’ Sales tax.

This is an informational letter only and not a private letter ruling pursuant to K.A.R. 92-19-59.

K.S.A. 79-3603(n) imposes a sales tax upon: “the gross receipts received from dues charged by public and private clubs, drinking establishments, organizations and business, payment of which entitles a member to use of facilities for recreation or entertainment, but such tax shall not be levied and collected upon gross receipts received from: (1) Dues charged by any organization exempt from property taxation pursuant to paragraphs Eighth and Ninth of K.S.A. 79-201, and amendments thereto; and (2) sales of memberships in a nonprofit organization which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986, and whose purpose is to support the operation of a nonprofit zoo. . .”

Please be advised that the gross receipts received from the theatre memberships would be subject to the appropriate Kansas sales tax, since the respective memberships allow the member admission into the facility to view the performances. The non-profit zoo memberships are specifically exempt by statute. Therefore, in order for the theatre memberships to be exempt from Kansas sales tax, specific legislation would be needed. If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 09/14/1998 Date Modified: 10/10/2001

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