A city owns and operates an auditorium-coliseum and has begun charging patrons to park for events. Is the parking fee taxable if the city is the sole entity charging for parking, and is it taxable if the city instead shares the net parking profit with the event promoter leasing the facility?

Plain-English summary

A city that owns and operates an auditorium-coliseum began charging patrons to park in its lot during events. Sometimes the city is the sole entity collecting the parking fee, and sometimes it shares the net parking profit with the event promoter leasing the facility. The city asked whether the parking fee is taxable in either scenario.

The Comptroller's answer: yes, the fee is taxable either way — whether the city collects it alone or shares the profit with the event. Rule 3.315(a) (Motor Vehicle Parking and Storage) makes sales tax due on parking and storage fees for a motor vehicle regardless of whether the lot is privately or municipally owned, and regardless of the form the charge takes — parking meters, decals, permits for parking or storage in any lot or garage, and even impound fees are all covered.

What this means for you

Cities and municipal venues charging for event parking

Don't assume governmental ownership of the parking facility exempts the fee — Rule 3.315(a) applies the same taxable treatment to municipally owned lots as to private ones. This applies whether your government entity keeps 100% of the revenue or splits it with a private promoter leasing your venue.

Accountants and tax professionals advising municipalities or venue operators

This is a useful contrast with the earlier-enriched TX ruling on university parking (200001996L, this same batch), where a college's own faculty/staff/student parking permits were held EXEMPT. That exemption is narrow and specific to a university's own community; it doesn't extend to a municipal auditorium/coliseum charging the general public for event parking, which stays fully taxable under Rule 3.315(a) regardless of revenue-sharing arrangements.

Common questions

Q: Is parking revenue at a city-owned auditorium or coliseum exempt from sales tax just because a government entity owns the lot?
A: No — Rule 3.315(a) taxes parking/storage fees regardless of private or municipal ownership.

Q: Does sharing the parking profit with an event promoter change the tax treatment?
A: No — the fee is taxable whether the city keeps all the revenue or shares it with the event.

Q: What forms of parking charges does Rule 3.315(a) cover?
A: Parking meters, decals, permits for lots or garages, and even impound fees, whether privately or municipally owned.

Q: Can I rely on this letter for my own municipal venue's parking program?
A: No. This opinion is based on the facts presented, and other facts though similar may provide a different result; it can be relied on only by the taxpayer it was issued to.

Citations and references

Statutes and rules:

• 34 Tex. Admin. Code Rule 3.315(a) (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/9912933L

Original ruling text

December 8, 1999

Subject: Parking Lot Fees

Dear **:

This is in response to your request for a ruling on the following fact
situation and questions:

The City of ** owns and operates an Auditorium-Coliseum. We have
begun charging for patrons to park on the parking lot for events. Sometimes
the City is the sole entity charging for parking and sometimes the net profit
is shared with the event that is leasing the facility. My question is: Is the
fee charged for parking taxable if the City is the sole entity charging for
parking? Is the fee taxable if the City/Event is jointly sharing in the profit?

Response: Yes, the fee is taxable whether the city is charging for parking or
sharing the profits from parking revenues. Subsection (a) of Rule 3.315- Motor
Vehicle Parking and Storage provides that sales tax is due on parking and
storage fees for a motor vehicle, including parking meters, either private or
municipally owned, fees, decals and permits for parking or storage in any lots
or garages, including impound fees

Sales tax rules can be accessed on the Internet at
http://www.window.state.tx.us/taxinfo/rulendx/ruleindex.html

The State Tax Automated Research system may be accessed on the Internet at:

http://www.window.state.tx.us/

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

I hope this information answers your questions. If you need additional
information, please call me toll-free at 1-800-531-5441, extension 3-4502. The
direct line is 512/463-4502. You may also write to Tax Policy Division,
Comptroller of Public Accounts. You may also e-mail our tax help section at:

Gilbert Zamora

Tax Policy Division