Are admission ticket sales — including service charges — taxable in Kansas, and are free ticket give-aways taxable?

Plain-English summary

A company selling event admissions asked whether Kansas sales tax applies to its ticket sales — specifically whether service charges added to a ticket are taxable, and whether free give-away passes are taxable.

Admissions are taxable, service charges included. K.S.A. 79-3603(e) taxes "the gross receipts from the sale of admissions to any place providing amusement, entertainment or recreation services." The Department defined the base: "'Gross receipts' means the total selling price or the amount received . . . in money, credits, property or other consideration valued in money from sales at retail within this state." Applying that, "[t]he admission ticket sales, including any service charges, would be subject to sales tax in the state of Kansas, pursuant to K.S.A. 79-3603(e)." The service charge is part of the total consideration for the admission, so it is taxed along with the ticket.

Free passes — not taxable. "Since no payment is received for the free ticket passes, your company would not be obligated to remit Kansas sales tax(es) on the respective give-aways." With no consideration received, there are no gross receipts to tax.

Bottom line: tax the full price of a paid admission, including any service charge; a genuinely free pass generates no taxable receipts.

What this means for you

Venues and ticket sellers

Charge Kansas sales tax on the full admission price, and include any service or handling charge in the taxable amount. You cannot carve the service charge out of the taxable base — "gross receipts" is the total consideration received for the admission.

Free give-aways are outside the tax

A complimentary pass for which you receive no payment produces no gross receipts, so there is no sales tax to remit on it. Keep records distinguishing genuine free passes from discounted or bundled tickets, which still involve consideration.

Watch bundled or "comped" arrangements

The line is whether payment (money, credits, property, or other consideration) is received. If a "free" pass is really part of a paid package or given for other consideration, that consideration can be taxable — the exemption here is for passes given away for nothing.

Common questions

Q: Are service charges on admission tickets taxable in Kansas?
A: Yes. The Department ruled admission ticket sales including any service charges are taxable under K.S.A. 79-3603(e), because the service charge is part of the taxable gross receipts.

Q: What counts as taxable "gross receipts"?
A: The total selling price or amount received — in money, credits, property, or other consideration valued in money — from the sale.

Q: Do I owe tax on free ticket passes?
A: No. Because no payment is received for a free pass, there are no gross receipts and no Kansas sales tax to remit on the give-away.

Citations and references

• K.S.A. 79-3603(e) — imposes sales tax on the gross receipts from the sale of admissions to any place providing amusement, entertainment, or recreation services; the basis for taxing the paid admission tickets (including service charges), while free passes generate no taxable gross receipts.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1999-247

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

October 28, 1999

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Dear Ms. TTTTTTT:

We wish to acknowledge receipt of your letter dated October 1, 1999, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 79-3603(e) imposes a sales tax upon: “the gross receipts from the sale of admissions to any place providing amusement, entertainment or recreation services. . .”

"Gross receipts" means the total selling price or the amount received as defined in the Kansas Retailers' Sales Tax Act, in money, credits, property or other consideration valued in money from sales at retail within this state.

The admission ticket sales, including any service charges, would be subject to sales tax in the state of Kansas, pursuant to K.S.A. 79-3603(e). Since no payment is received for the free ticket passes, your company would not be obligated to remit Kansas sales tax(es) on the respective give-aways.

This is a private letter ruling pursuant to K.A.R. 92-19-59. It is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to an accurate determination by the department, this ruling is null and void. This ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or published revenue ruling, that materially effects this private letter ruling. If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

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: 11/09/1999 Date Modified: 10/11/2001

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