If I start a business putting on fashion shows and selling calendars/posters of the models, do I owe Texas sales tax on ticket admissions and on the calendars/posters, and do I need a tax permit?

Plain-English summary

A prospective small-business owner planned to put on fashion shows for stores and up-and-coming designers, helping them promote their clothing lines, and also sell calendars and posters featuring the show's models. They asked the Comptroller whether any of this triggered Texas sales tax obligations.

The answer was straightforward: both revenue streams are taxable. Admission charged for a fashion show is subject to Texas sales tax as long as the event takes place in Texas. Selling calendars and posters of the models is also a taxable sale of tangible personal property -- but since the business is reselling printed items, it can buy those calendars and posters from its printer tax-free by issuing the printer a resale certificate, and then collect tax from the end customer instead.

Because the business will be selling taxable items in Texas, it needs a Limited Texas Sales and Use Tax permit -- free of charge, available as form AP-157 for a sole owner or AP-201 for a partnership, corporation, or similar entity, filed with a Comptroller field office or by mail.

What this means for you

Event promoters and small business owners running fashion shows, exhibitions, or similar ticketed events

Admission fees to entertainment-style events held in Texas are generally taxable, and you'll need a sales tax permit (free to obtain) before you start selling tickets or merchandise.

Sellers of promotional merchandise (calendars, posters, programs) tied to an event

You can buy the printed merchandise tax-free from your printer with a resale certificate, since you're reselling it to attendees -- just be sure to collect and remit sales tax on your own sale to the end customer.

Common questions

Q: Is admission to a fashion show taxable in Texas?
A: Yes, if the event and its location are within Texas.

Q: Can I buy calendars/posters tax-free if I'm reselling them?
A: Yes -- issue your printer a resale certificate in lieu of paying tax on the purchase, then collect sales tax from the buyer when you sell them.

Q: Do I need a permit to sell these items?
A: Yes -- a Limited Texas Sales and Use Tax permit, which is free. Use form AP-157 (sole owner) or AP-201 (partnership, corporation, etc.).

Q: Does this letter bind the Comptroller for my specific business?
A: No -- this is an informal 2001 letter answering one prospective business owner's question, not a modern Private Letter Ruling or General Information Letter, and it cannot be relied on by anyone else.

Citations and references

No statutes or rules were cited by section number in this letter; it applies the Comptroller's general framework for taxable admissions, taxable sales of tangible personal property, resale certificates, and permit requirements.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200109510L

Original ruling text

September 28, 2001

Dear **:

You are opening a small business putting on fashion shows for stores and
upcoming designers helping them promote their clothing line. You also plan to
sell calendars and posters of your models.

The sale of an admission to a fashion show is subject to tax if the event and
the location are within the State of Texas. The sale of calendars and posters
of models is subject to sales tax. You may issue a resale certificate to the
printer of the calendars and posters in lieu of the tax. A person selling
taxable items (admission to fashion shows, calendars and posters) in Texas must
obtain a Limited Texas Sales and Use Tax permit. There is no charge for the
permit.

You may go to our web site address to download a copy of form AP-157
application for a sales and use tax permit if your are a sole owner or form
AP-201 if your business is a partnership, corporation etc. Once you complete
the form, you may drop it off at one of our field offices located around the
state or mail it to the address on the application.

This opinion is rendered based on the facts presented. Other facts, though
similar, may yield different results.

You may access the sales tax rules online and a wealth of other information
through our Window on State Government web site at .
Click on Sales Tax under Quick Links for the rules and then scroll and click on
State Sales Tax under Current Tax Rules.

If you have any questions or require additional information, you may submit
inquiries to our tax help e-mail address at , call me
at 1-800-531-5441, extension 6-5809 or write to Tax Policy Division, Post
Office Box 13528, Austin, Texas 78711-3528.

Sincerely,

Emilio S. Lerma
Tax Policy Division