Oklahoma: Admissions Are Subject to Sales Tax
- Jan 20, 2015 | Gail Cole
Sales tax is due on the gross receipts derived from sales of tickets for admission to places of amusement, display, entertainment, exhibition, sports, and other recreational activities are subject to tax in Oklahoma, unless specifically exempt from sales tax by state statute.
Under Oklahoma law, the transfer of tangible personal property "for a valuable consideration” is a taxable activity. It includes: “the sale, gift, exchange, or other disposition of admission, dues, or fees to clubs, places of amusement, or recreational or athletic events or for the privilege of having access to or the use of amusement, recreational, athletic or entertainment facilities” (68 O.S. Sec. 1352(22)(c) - follow link and search for proper section).
A letter ruling from the Oklahoma Tax Commission points to the above statute in answer to a taxpayer’s question, are ticket sales to a silent auction taxable? The Tax Commission replies that tax applies when “the ticket charge is required for admission and is not a totally voluntary contribution.” Only totally voluntary donations may be exempt from sales tax. Oklahoma sales tax applies to "free or complimentary admissions which have a value equivalent to the charge that would otherwise have been made."
According to OAC 710:65-19-75:
“Persons conducting recreational events occasionally assert that the receipts are not taxable because they are donations and not charges for admission or an item of tangible personal property. To qualify as a donation, a payment must be totally voluntary and no restriction whatsoever may be placed on the entrance or receipt of tangible personal property of persons not making a donation. The facts surrounding the request for the donation must be obvious that admittance or receipt of property is not restricted to those making a donation. A set amount for the donation (through newspaper publicity or signs at the entrance), a turnstile or restrictive device that must be passed through, denial of tangible personal property or an attendant requesting a donation at the door shall be presumptive evidence that the charge is not a donation but that the payment is required. [See: IRS Revenue Rule 67-246]”
In short, Oklahoma sales tax applies to admission tickets for the silent auction described in the letter ruling. While letter rulings “may be generally relied upon only by the entity to whom it is issued,” the statutes, rules and regulations referenced in the letter ruling apply to all Oklahoma taxpayers. As a result, they can be instructional.
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