Texas Letter Ruling 9210L1197G12: Fair Exhibitors — Parking Passes Provided Together With Admission Fee

Plain-English summary

The Texas Comptroller's Tax Administration Division addressed how sales tax applies when a tax-exempt fair organizer sells admission passes to exhibitors that also come with complimentary parking. The organizer, an I.R.C. Section 501(c)(3) exempt organization, planned to contract with exhibitors at an agricultural fair: the exhibitors and their employees would get admission to the fair for its duration, and, as part of that same admission pass, a complimentary place to park — with a display pass given to put in the vehicle.

The Comptroller ruled that if the agreement gives exhibitors and their employees complimentary parking passes for the duration of the fair, none of the amount charged for the admission pass is taxable as motor vehicle parking. However, if any amount of the charge can be attributed to the parking — whether stated in the agreement itself or determined some other way — sales tax would be due on that parking amount. The letter points to section (b) of Rule 3.315, Motor Vehicle Parking and Storage, for this distinction.

The Comptroller noted this opinion is based on the specific facts presented, and that other, similar facts could lead to a different result.

What this means for you

Fair and exhibit organizers (especially exempt organizations)

If you sell exhibitors a single admission pass that bundles in complimentary parking with no separate charge or attributable value for the parking, the whole admission charge escapes sales tax on the parking portion. The key is that the parking must be truly complimentary — not separately priced or otherwise identifiable as a parking charge within the total.

Accountants and tax professionals advising exhibition or fair clients

Structure exhibitor agreements so that parking is described as complimentary and bundled into the admission price, without any mechanism (in the contract or elsewhere) that would let a parking value be attributed to part of the charge. If a specific dollar amount or method exists to isolate a parking charge, sales tax becomes due on that portion under Rule 3.315(b).

Business owners renting fair or exhibit space to exhibitors

This ruling applies specifically to the exempt fair organizer's own admission-pass arrangement with its exhibitors. If you are a vendor or exhibitor purchasing such a pass, the taxability turns on how your organizer structures the charge — ask whether any portion of your fee is being attributed to parking.

Common questions

Q: Is a complimentary parking pass given with fair admission taxable?
A: Not by itself. If the agreement provides that exhibitors and their employees receive complimentary parking passes for the duration of the fair, no part of the admission charge is taxable as motor vehicle parking.

Q: When would sales tax apply to the parking?
A: If any amount of the charge can be attributed to the parking — either stated directly in the agreement or determined through some other method — sales tax would be due on that amount, per Rule 3.315(b).

Q: Does it matter that the organization is a 501(c)(3) exempt organization?
A: The ruling describes the requesting organizer as an exempt organization under I.R.C. Section 501(c)(3), but the Comptroller's answer turns on how the admission and parking charge is structured, not on the organizer's exempt status.

Q: Can this organizer rely on this letter if its facts change?
A: The Comptroller explicitly notes the opinion is based on the facts presented, and that other facts, though similar, may produce a different result.

Citations and references

Rules:

• 34 Tex. Admin. Code Rule 3.315(b) (Motor Vehicle Parking and Storage)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9210L1197G12

Original ruling text

October 20, 1992

Dear **:

This is in response to your recent letter regarding the taxability of admission
passes sold to exhibitors at agricultural fairs and exhibits.

FACTS

Your client is an exempt organization under I.R.C. Section 501(c)(3). In the
future, your client plans on executing contracts with its exhibitors. The
contracts will provide the exhibitors and their employees admission into the
public fair for its duration and ancillary to the admission; a complimentary
place to park is available. A pass is given to the exhibitors to display in
their vehicle.

QUESTION

Would the charge for the admission pass to the exhibitors be taxable if
complimentary parking is provided.

RESPONSE

If the agreement between your client and the exhibitors provides that the
exhibitors and their employees are to receive complimentary parking passes for
the duration of the fair, no part of the amount charged for the admission
passes would be taxable as motor vehicle parking. If an amount can be a
attributed to the parking, either through the agreement itself or some other
method, sales tax would be due. See section (b) of the enclosed copy of Rule
3.315 Motor Vehicle Parking and Storage.

This opinion is based on the facts presented. Other facts though similar may
provide a different result.

If you have other questions or need more information, you may call me at
1-800-252-5555, extension 3-4502. The regular number is 512/463-4600. You may
also write to Tax Administration Division at the above address.

Sincerely,

Gilbert Zamora
Tax Administration Division