Admissions Tax Payable When Admission Charge Collected
PURPOSE: The purpose of this Policy Statement is to clarify that admissions tax is imposed in the period when the payment for admission to the event is received, rather than in the period when the event is held.
BACKGROUND: Subject to certain exceptions, Conn. Gen. Stat. §12-541 imposes a 10 percent tax on the admission charge to any place of amusement, entertainment or recreation. Conn. Gen. Stat. §12-545 provides that the admissions tax shall be imposed on amounts received within or without the state but only if the place of admission is within the state.
STATUTORY AUTHORITY: Conn. Gen. Stat. §§12-541, 12-545, 12-547.
EFFECTIVE DATE: Effective upon issuance and applicable to all open periods.
TAX IMPOSED WHEN ADMISSION PAID: Conn. Gen. Stat. §12-541 imposes a 10 percent tax on the admission charge to any place of amusement, entertainment or recreation. The tax is imposed upon the person making the admission charge and reimbursement for the tax shall be collected by such person from the purchaser. It is the making of the charge for admission and the payment of such charge, and not the admittance into the place to which admission is charged, which constitutes the taxable event for purposes of the admissions tax.
The Connecticut Supreme Court has spoken directly on this point:
The admissions tax is a transaction tax. The taxable event is the admission charge to the patron. At that point the tax is imposed on the person making the charge, giving that person the right of reimbursement from the purchaser. Section 12-547 clearly provides that the admissions tax must be computed and paid in the month following that in which it was collected . . . When the provisions of chapter 225 are interpreted as a whole, they unambiguously provide that, in the absence of an exemption, the admissions tax is imposed at the time the admission charge is collected.
Connecticut Theater Foundation, Inc. v. Brown, 179 Conn. 672, 675, 677, 427 A.2d 863 (1980).
APPLICATION OF FEDERAL LAW: The Connecticut admissions tax is based on the federal admissions tax, which was repealed by the Excise Tax Reduction Act of 1965, Pub. L. No. 89-44, §301, 79 Stat. 136. The courts of this state look directly to federal law and its interpretation to determine state issues relating to our tax. Carpenteri-Waddington, Inc. v. Commissioner of Revenue Services, 231 Conn. 355, 364-67, 650 A.2d 534 (1994). See also JLM, Inc. v. Meehan, 43 Conn. Sup. 135, 650 A.2d 1 (1994).
The federal regulation in effect at the time (1965) also specifically addressed this issue:
The tax applies to the payment for admission, not to the admission itself, and as soon as payment for admission is made the tax attaches, whether or not the admission ever takes place, and no refund of the tax can be allowed by reason of nonuse of the ticket unless the admission charge is also refunded . . .
Treas. Reg. 43, §101.4(a)(1).
CANCELLATIONS: If an event is canceled after the sale of advance tickets and the admission charge and admissions tax are refunded, the person making the admission charge may make a claim for refund or credit, using established Departmental procedures.
SALES TAX IMPLICATIONS: Service charges are not subject to the admissions tax. A service charge is simply a fee for making tickets available to customers, which need not be paid in order to gain admission. However, prior to January 1, 1995, service charges were subject to sales and use tax. See 1993 Conn. Pub. Act 74, §24.
EFFECT ON OTHER DOCUMENTS: None affected.
EFFECT OF THIS DOCUMENT: A Policy Statement is a document that explains in depth a current department policy or practice affecting the liability of taxpayers. Unlike a Ruling, a Policy Statement does not apply a policy or practice to a specific set of facts but it may be referred to for general guidance by taxpayers. Unlike a Special Notice, it does not announce a new policy or practice in response to changes in state or federal laws or regulations or to judicial decisions.
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FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.
Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.