Who collected and reported tax when amusement parks placed tickets with at-cost distributors versus markup resellers?

Plain-English summary

The February 25 letter corrected an overbroad sentence in an attached February 18 response. The amusement parks were not collectors and remitters for every ticket sale connected with their facilities.

The parks could assume tax collection and remittance for tickets placed with people who were not engaged in selling amusement admissions and who sold the tickets at cost or gave them away. Those distributors did not need sales-tax permits or amusement-tax reports, and the parks were responsible for the tax liability.

If a person resold tickets above cost, that person was a seller of amusement admissions. The reseller needed a sales-tax permit, collected tax on the retail selling price, remitted it to the state, and gave the park a resale certificate instead of tax.

The attached February 18 letter also said prizes transferred as part of a taxable amusement and items acquired to rent to amusement customers could be bought with resale certificates. It treated locker-space rental at an amusement facility as not subject to sales tax.

The correction referenced section (i)(3) of a new amusement rule effective February 20, 1985, but the rule text is not reproduced.

Common questions

Did at-cost distributors need permits? No under the park-assumption arrangement. What if tickets were sold above cost? The reseller needed a permit and collected tax on retail price. Who bore liability for at-cost or giveaway tickets? The parks. Were amusement-facility lockers taxable rentals? The attached letter said no.

Citations and references

The February 25 correction refers to section (i)(3) of an unnamed amusement rule effective February 20, 1985; the reproduced record does not supply a rule number.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8502L0633C08

Original ruling text

February 25, 1985

Dear **:

In my letter to you of February 18, 1985, I indicated that AMUSEMENT PARK A and
AMUSEMENT PARK B were designated as collectors and remitters of all sales tax
for all admissions sold with respect to their amusement facilities. This
statement, if read alone, is incorrect. The statement should have been read in
conjunction of an earlier statement in the letter about persons not engaged in
selling admissions to amusements, who receive tickets from providers to be
either sold at cost or given away. apologize for any misunderstanding. I will
restate our position as follows:

AMUSEMENT PARK A and AMUSEMENT PARK B are designated as collectors and
remitters of all sales tax for all admissions sold to persons not engaged in
selling admissions to amusements, who receive tickets from AMUSEMENT PARK A or
AMUSEMENT PARK B to be either sold at cost or given away. Such persons will not
be required to hold sales tax permits or to make any reports to this office on
amusement tax. AMUSEMENT PARK A and AMUSEMENT PARK B will be held responsible
for any tax liability on such ticket sales.

If AMUSEMENT PARK A and AMUSEMENT PARK B sells tickets to persons who resell
the tickets above cost, AMUSEMENT PARK A and AMUSEMENT PARK B may not collect
sales tax on those person's behalf. Persons who sell tickets above cost are
regarded as sellers of admissions to amusements. Such persons must hold sales
tax permits, collect sales tax on the retail sales price and remit the tax to
this office. They would issue AMUSEMENT PARK A and AMUSEMENT PARK B a resale
certificate in lieu of tax.

A copy of the new amusement rule, effective February 20, 1985, was mailed to
you on Friday, February 22, 1985. Please refer to section (i)(3).

If you have any questions or need more information, please call me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/475-1931. You may write me at the Tax Administration Division.

Sincerely,

(Mrs.) Wanda Hutcheson
Tax Policy Section
Tax Administration Division

cc: AMUSEMENT PARK B

February 18, 1985

Dear **:

Thank you for your letter of January 28, 1985 regarding the amusement tax as it
applies to AMUSEMENT PARK A and AMUSEMENT PARK B. I apologize for the delay in
responding, but since the Association could not agree on who should collect the
amusement tax, I wanted to wait to respond until the Comptroller's department
had a definite position.

We have now decided that all sellers of admissions to amusements must hold
sales tax permits and must either collect sales tax or get resale certificates
in lieu of tax. We have made an exception this rule for persons not engaged in
selling admissions to amusements, who receive tickets from providers to be
either sold at cost or given away. We will allow the provider, upon their
written request, to assume responsibility for tax collection and remittance.
Your letter of January 28, 1985 will be treated as such a request. AMUSEMENT
PARK A and AMUSEMENT PARK B is designated as collector and remitter of all
sales tax for all admissions sold with respect to their amusement facilities.
The persons with whom the tickets are placed will not be required to hold sales
tax permits or to make any reports to this office on amusement tax. AMUSEMENT
PARK A and AMUSEMENT PARK B will be held responsible for any tax liability on
these ticket sales.

The prizes transferred to customers as part of a taxable amusement may be
purchased tax free by issuing a resale certificate in lieu of tax.

Items purchased by a provider of an amusement to be rented to customers at the
amusement facilities may be purchased tax free by issuing a resale certificate
in lieu of tax.

The rental of locker space at an amusement facility is not a rental subject to
sales tax.

If I can be of further help, please call me at 1-800-252-5555 toll free from
anywhere in Texas. The regular number is 512/475-1931. You may write me at the
Tax Administration Division.

Sincerely,

Wanda Hutcheson
Tax Policy Section
Tax Administration Division

cc: AMUSEMENT PARK B