New Jersey: Taxable and Exempt Admission Charges
- Sales Tax News
- Jan 28, 2015 | Gail Cole
Admission charges generally are subject to sales tax in New Jersey. However, admission charges for events benefitting nonprofit organizations may be sales tax exempt.
An exemption from sales tax is permitted for admission charges to an event “if all of the proceeds from the admissions exclusively benefit one or more of the following types of organizations:
- IRC 501(c)(3) and similar nonprofit organizations described in N.J.S.A. 54:32B-9(b) that have a valid New Jersey Exempt Organization Certificate (Form ST-5);
- New Jersey State or local government agencies;
- An opera or symphony orchestra society or organization that receives substantial support from voluntary contributions; or
- A police or fire department of a political subdivision of the State, or a volunteer fire company, ambulance, first aid, or emergency company or squad, or to a retirement, pension, or disability fund solely for policemen or firemen, or a fund for their heirs.”
Sellers are required to collect sales tax on admission charges unless they are notified before sales begin that the charges are exempt.
Qualifying events run by promoters
Admissions sold by a promoter may be subject to sales tax or exempt. They are often exempt if all of the following conditions are met:
- “Before admissions are sold, the promoter has a written, signed contract concerning the disposition of the admission receipts; and
- The contract provides a clear indication that all of the admission proceeds will benefit the named nonprofit organizations; and
- The named nonprofit organizations that will receive the admission proceeds are of the types listed in N.J.S.A. 54:32B-9(f)(1)(see above); and
- The contract provides that all parties, such as promoters and entertainers, either will waive compensation or will receive it on an hourly, per diem, or flat-fee basis, and not as a specific percentage of the gross or net admission receipts. Net admission receipts means gross admission receipts minus expenses (e.g., rental fee for performance hall, technical lighting and sound).”
Admissions charges to the following events are subject to New Jersey sales tax:
- Carnivals, circuses, rodeos, and “other events in which a professional performer or operator participates for compensation.”
- Certain “athletic competitions, even if the proceeds are exclusively for one or more qualified nonprofit organization.”
Additional information and examples may be found in New Jersey Division of Taxation.
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