Taxmen at the Movies
- Nov 19, 2015 | Gail Cole
As foul weather settles in for the winter, Americans will turn in droves to the screen to help pass the hours. Many will stay at home. Others will venture out to the cinema, to watch the latest movies in the company of others.
Motion picture theaters in West Virginia must collect sales tax on the following charges:
- Admissions to movies
- Concessions (most but not all)
- Programs and souvenirs
- Video game playing
The purchase, lease or rental of motion picture films and the purchase, lease or rental of video games by the theater are exempt from sales tax provided sales tax is charged on admissions and game fees. Exemption certificates are required.
The taxability of concessions is a bit more complex. Sales, purchases and uses of food and food ingredients intended for human consumption ceased to be subject to sales tax in West Virginia in 2013. Candy, chocolate covered nuts, and chewing gum made the list of exempt items (if sold unheated and without eating utensils, as is usually the case with these products).
Yet prepared food, such as the popcorn sold at theaters, is subject to tax. So are soft drinks (and all food sold through vending machines).
The tricky part comes when you bundle taxable and exempt foods/drinks together, as theaters sometimes do. As explained by the West Virginia Department of Taxation in TSD-419:
“Popcorn prepared by the seller and sold with a drink and candy for one price is a bundled transaction subject to the 6% rate. However, if the popcorn, drink and candy are sold individually, the popcorn and drink are subject to the 6% rate while the candy is subject to cessation of tax.”
Now that that’s settled, you may sit back and enjoy the show. Watch how sales tax automation works — it’s a classic.