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North Carolina Taxes Arts as Rhode Island Exempts Arts

  • Dec 2, 2013 | Gail Cole

 Admissions to the Levine Museum of the New South in Charlotte will be subject to sales tax, effective January 1, 2014.

On December 1, 2013, Rhode Island instituted a statewide sales tax exemption for the arts. Exempted items now include sales of original work by fine artists, writers and composers.

On January 1, 2014, North Carolina is expanding sales tax to the arts. Newly taxable will be admission charges for live performances of any kind, shows, motion pictures, museums, exhibits, gardens and cultural sites. If you opt to pay for a guided tour at a museum, exhibit, cultural site, etc., it will be subject to sales tax, too.

Admissions to all live sporting events will also be subject to sales tax, effective January 1. This includes both professional and collegiate events.

Expanding sales tax to admissions is one way the state will raise revenue dropping along with personal and corporate income tax rates. Republican backers of this plan hope to “boost the overall economy” with job creation.

Some will feel it, some won't

Supporters of taxing the arts and sporting events argue that the new tax will hardly be felt. At the Levine Museum of the New South in Charlotte, the price of admissions for an adult will increase by about 57 cents—from $8.00 to $8.57. For students, the price will jump from $4.00 to $4.29 (Charlotte Observer).

57 cents may not seem like a lot of extra money. However, detractors argue that “very price-sensitive groups,” such as senior citizens and students, will feel the addition of sales tax. Rates in North Carolina range from 6.75% to 7.5%.

Herman Stone of Stone Theatres wonders why “admissions were ‘singled out’ in the expanded sales tax while services such as haircuts, auto repairs, doctors and dentists remain exempt.” He argues, “We don’t need to make it more expensive for people to go to the movie theater.” Remember when it cost just a few dollars to go to the movies?

Nuts and bolts

While North Carolinians will notice the addition of sales tax to ticket prices when they go to the movies on January 1, the tax will not apply to all admissions on that date. Tickets that are available prior to January 1, 2014, for an event occurring after January 1 will not be subject to the tax, no matter when they’re purchased. For example, if you purchase a ticket today for a show taking place next April, you won’t pay sales tax. If you wait to purchase a ticket for that show in March, you still won’t pay sales tax.

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photo credit: hyperion327 via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.