LR 8190
Tickets to Non-Profit Exhibition are Exempt from Sales Tax
May 02, 2022
Dear Applicant:
This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated March 7, 2022.
The facts as presented in your letter ruling request are summarized as follows:
Applicant partnered with a non-profit, charitable organization to host an art exhibition in a Missouri city. Applicant is the producer of the exhibition and the non-profit is the presenter of the exhibition. Applicant's responsibilities as the producer, as outlined by contact, are to provide and pay for the elements necessary to arrange for the creation, operations, and promotion of the art exhibition. These elements specifically include all marketing and promotion of the exhibition to ticket buyers during the term of this agreement. In addition, Applicant shall provide or arrange to provide the necessary production, sets, equipment, technical and management expertise, house staff, and box office services to ensure that the production and operation of the exhibition is carried out in an effective and efficient manner. Applicant is also responsible for making arrangements to have admission tickets for the exhibit made available to the public through the exhibition's designated electronic ticketing system. This includes processing and holding all ticket sales until the end of the art exhibition. Upon final accounting of ticket sales, funds will be transferred to the non-profit to compensate for their role in the art exhibition. The non-profit's responsibilities as the presenter are to provide and pay for the elements necessary to arrange for the booking and promotion of the exhibition. These elements specifically include marketing, promoting, and advertising the exhibition.
Additionally, Applicant may host future exhibitions where the non-profit acts as the ticket broker and is responsible for processing and holding all ticket sales for the exhibition.
ISSUE:
Are the exhibition tickets exempt from sales tax under section 144.030.2(19), RSMo?
RESPONSE:
Yes. The retail sale of exhibition tickets are sales tax exempt, only if all the proceeds of the ticket sales are retained by the exempt entity, and used as a part of the exempt entity's religious, charitable, or educational functions and activities.
Section 144.020.1, RSMo states:
"A tax is hereby levied and imposed...upon all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state..."
And specifically, in section 144.020.1(2), RSMo:
"A tax equivalent to four percent of the amount paid for admission and seating accommodations, or fees paid to, or in any place of amusements, entertainment or recreation, games and athletic events, except amounts paid for any instructional class;"
However, section 144.030.2(19), RSMo exempts:
"All sales made by or to religious and charitable organizations and institutions in their religious, charitable or education functions and activities..."
The tickets at issue in this letter ruling are being sold by, or on behalf of, an exempt charitable organization as contemplated by section 144.030.2(19). Therefore, if all the proceeds are retained by the exempt charitable organization and used in their charitable or educational functions and activities, the tickets are exempt from sales tax.
This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals. If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change. For this reason, the interpretation set forth above should be reviewed on a regular basis. Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.
Should additional information be needed, please contact Legal Counsel J. Ross Shelton, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, (573)-751-0961.
Sincerely,
Wayne Wallingford