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Missouri Department of Revenue

Jay Nixon, Governor Alana M. Barragn-Scott, Director

LR 6860
Taxability of Tickets To Entertainment Events Sold by Out-Of-State Ticket Broker
August 22, 2011 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 July 7, 2011. The facts as presented in your letter ruling request and from your web site are summarized as follows: Applicant is a ticket broker located outside Missouri. Applicant acquires and sells tickets to events located within and outside of Missouri. Applicant is unaffiliated with the places of amusement and entertainment from which it buys tickets. Applicant purchases all tickets in arms length transactions for fair market value. Applicant acquires tickets from unrelated individuals or the event venues. Applicant sells event tickets from its retail location outside Missouri and through the internet. Applicant charges the customer a range of prices falling both below and above the face value. With the exception of mailing costs, Applicant typically does not collect any other fees.

ISSUE 1:
Should Applicant collect and remit Missouri sales taxes on its sales of event tickets?

RESPONSE 1:
No. Applicant should not collect and remit Missouri sales taxes on its sales of event tickets. Section 144.020.1(2), RSMo, imposes a tax upon the amount paid for admission and seating accommodations, or fees paid to, or in any place of amusement, entertainment or recreation, games and athletic events. Section 144.018.2, RSMo, provides in relevant part:

A place of amusement, entertainment or recreation, including games or athletic events, shall remit tax on the amount paid for admissions or seating accommodations, or fees paid to, or in such place of amusement, entertainment or recreation. Any subsequent sale of such admissions or seating accommodations shall not be subject to tax if the initial sale was an arms length transaction for fair market value with an unaffiliated entity. The places of amusement and entertainment are required to collect and remit sales tax on their sales of tickets to Applicant. Applicant is unaffiliated with the places of amusement and entertainment from which it buys tickets. Applicant purchases all tickets in arms length transactions for fair market value. Therefore, Applicants subsequent sales of tickets to its customers are not subject to sales tax because the initial sales to the Applicant were at arms length for fair market value with an unaffiliated entity.

ISSUE 2:
Should Applicant collect and remit Missouri use taxes on its sales of event tickets?

RESPONSE 2:
No. Applicant should not collect and remit Missouri use taxes on its sales of event tickets. The use tax under Section 144.610.1, RSMo, is imposed upon the sale price of the tangible personal property stored, used, or consumed in Missouri. As described in Response 1, the sales tax is imposed on the place of amusement or entertainment. The admission fee to a place of amusement or entertainment is not paid as a result of a sale of tangible personal property, but represents a receipt for the right to receive the service. Admission to the place of amusement or entertainment is the taxable event and the sales tax is incurred at the Missouri location where the promoter or operator of the place of amusement provides the amusement or entertainment. See Six Flags Theme Parks, Inc. v. Director of Revenue, 102 S.W.3d 526 (Mo. banc 2003). Therefore, Applicants sales of event tickets are not subject to use tax. This letter ruling is binding upon the Department of Revenue with respect to 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 Kati Kiefer, General Counsels Office, Post Office Box 475, Jefferson City, Missouri 65105-0475 (phone 573-7510961), or me.

Sincerely, Alana M. Barragn-Scott