Football and Taxes on top of Taxes

[paladin4ever]

"The Man" wants a piece of your entertainment dollars...

Football team required to pay sales tax on total amount received for ticket

A taxpayer that was a professional football team was required to pay Missouri sales tax on the total amount the taxpayer received from its ticket sales, which included a local entertainment license tax. The taxpayer sold tickets for National League Football games played in the city of St. Louis. Pursuant to city laws, the city imposed upon the taxpayer a local entertainment license tax. The taxpayer chose to pass its obligation to pay the local license tax through to ticket purchasers who sought admission to football games played in the city. When the taxpayer collected and remitted the local license tax to the city, the city issued the taxpayer a gross receipt license to operate their business in the city. Under Missouri law, the total amount of the sales price is deemed to be the amount received, and sales tax is imposed on the amount paid for admission or fees paid to athletic events. Here, despite the taxpayer’s assertion that the local license tax included in the fixed ticket price was not necessarily paid for admission, the taxpayer structured its collection of the local license tax such that it was included in the amount paid for admission as contemplated under state law. Under local law, it was the taxpayer – not those who purchased tickets to football games – who bore the local license tax. Choosing to pass this obligation through to ticket purchasers did not transform the taxpayer into the city’s tax collection agents. The taxpayer received a fixed dollar amount from ticket purchasers seeking admission to football games, which included the local license tax. Accordingly, the total amount the taxpayer received from the ticket purchasers, which included the local entertainment tax, was subject to sales tax and did not constitute a tax upon a tax.

The St. Louis Rams LLC, f/k/a The St. Louis Rams Partnership v. Director of Revenue, Missouri Supreme Court, No. SC95910, August 1, 2017