Openai/69177b63-caec-8000-a009-8936c37238c5: Difference between revisions
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by freem.ai... |
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{{DISPLAYTITLE:Sales tax on entry fee}} | {{DISPLAYTITLE:Sales tax on entry fee}} | ||
''This conversation was exported from ChatGPT''<ref>{{cite web|title=Sales tax on entry fee|url=https://chatgpt.com/share/69177b63-caec-8000-a009-8936c37238c5|publisher=ChatGPT|access-date=2025-11- | ''This conversation was exported from ChatGPT''<ref>{{cite web|title=Sales tax on entry fee|url=https://chatgpt.com/share/69177b63-caec-8000-a009-8936c37238c5|publisher=ChatGPT|access-date=2025-11-17}}</ref> | ||
== gpt-5-1 == | == gpt-5-1 == | ||
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===== Key points: ===== | ===== Key points: ===== | ||
* Texas treats amusement services (which include “participatory sports and games” among others) as taxable unless an exemption applies. Texas Comptroller<ref>{{cite web|title=Texas Comptroller|url=https://comptroller.texas.gov/taxes/publications/96-259.php|publisher=Texas Comptroller|access-date=2025-11- | * Texas treats amusement services (which include “participatory sports and games” among others) as taxable unless an exemption applies. Texas Comptroller<ref>{{cite web|title=Texas Comptroller|url=https://comptroller.texas.gov/taxes/publications/96-259.php|publisher=Texas Comptroller|access-date=2025-11-17}}</ref> | ||
* The rule for amusement services, § 3.298 of the Texas Administrative Code, states that the “sales price of an amusement service” includes the fee charged for admission to an amusement, including service charges. Legal Information Institute<ref>{{cite web|title=Legal Information Institute|url=https://www.law.cornell.edu/regulations/texas/34-Tex-Admin-Code-SS-3-298|publisher=Legal Information Institute|access-date=2025-11- | * The rule for amusement services, § 3.298 of the Texas Administrative Code, states that the “sales price of an amusement service” includes the fee charged for admission to an amusement, including service charges. Legal Information Institute<ref>{{cite web|title=Legal Information Institute|url=https://www.law.cornell.edu/regulations/texas/34-Tex-Admin-Code-SS-3-298|publisher=Legal Information Institute|access-date=2025-11-17}}</ref> | ||
* “Entry fees” (for contests) are specifically addressed at § 3.298(c): > | * “Entry fees” (for contests) are specifically addressed at § 3.298(c): > | ||
* There is also an advisory ruling (8810496L) which states: “Generally, fees for admission to dog shows, races or other sporting events are taxable amusement services. Entry fees to participate in an event if the fee …” (the ruling truncates) but the implication is that participant entry fees may still be taxable unless they fit into the exception. STAR Texas<ref>{{cite web|title=STAR Texas|url=https://star.comptroller.texas.gov/view/8810496L|publisher=STAR Texas|access-date=2025-11- | * There is also an advisory ruling (8810496L) which states: “Generally, fees for admission to dog shows, races or other sporting events are taxable amusement services. Entry fees to participate in an event if the fee …” (the ruling truncates) but the implication is that participant entry fees may still be taxable unless they fit into the exception. STAR Texas<ref>{{cite web|title=STAR Texas|url=https://star.comptroller.texas.gov/view/8810496L|publisher=STAR Texas|access-date=2025-11-17}}</ref> | ||
* Publication 96-211 (Fairs, Festivals, etc.) says: “Admission fees are taxable. The event promoter must collect sales tax on admission fees.” Texas Comptroller<ref>{{cite web|title=Texas Comptroller|url=https://comptroller.texas.gov/taxes/publications/96-211.php|publisher=Texas Comptroller|access-date=2025-11- | * Publication 96-211 (Fairs, Festivals, etc.) says: “Admission fees are taxable. The event promoter must collect sales tax on admission fees.” Texas Comptroller<ref>{{cite web|title=Texas Comptroller|url=https://comptroller.texas.gov/taxes/publications/96-211.php|publisher=Texas Comptroller|access-date=2025-11-17}}</ref> | ||
===== Given your scenario: you’re holding a tournament for the Pokémon TCG, participants pay an entry fee, and there’s no guarantee that every entrant wins a prize (so it’s more like a typical tournament with winners and prizes rather than everyone gets something). You ask: do you charge sales tax on the entry fee, or handle it another way? ===== | ===== Given your scenario: you’re holding a tournament for the Pokémon TCG, participants pay an entry fee, and there’s no guarantee that every entrant wins a prize (so it’s more like a typical tournament with winners and prizes rather than everyone gets something). You ask: do you charge sales tax on the entry fee, or handle it another way? ===== | ||
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* Alternatively, is the individual one who would not normally use the facility or pay a fee except for participation in this contest? That’s the second exception. | * Alternatively, is the individual one who would not normally use the facility or pay a fee except for participation in this contest? That’s the second exception. | ||
If either of those exceptions apply, then the entry fee may not be taxable as an amusement service admission. Legal Information Institute<ref>{{cite web|title=Legal Information Institute|url=https://www.law.cornell.edu/regulations/texas/34-Tex-Admin-Code-SS-3-298|publisher=Legal Information Institute|access-date=2025-11- | If either of those exceptions apply, then the entry fee may not be taxable as an amusement service admission. Legal Information Institute<ref>{{cite web|title=Legal Information Institute|url=https://www.law.cornell.edu/regulations/texas/34-Tex-Admin-Code-SS-3-298|publisher=Legal Information Institute|access-date=2025-11-17}}</ref> | ||
In your case: the entry fee is being paid to participate. That aligns somewhat with “paying to compete in a contest.” The question is whether the fee “substantially exceeds what would normally be paid for use of the facility,” and whether part of the fee is explicitly for the contest and prizes. Also, whether the venue use is incidental vs. the primary purpose being the contest. | In your case: the entry fee is being paid to participate. That aligns somewhat with “paying to compete in a contest.” The question is whether the fee “substantially exceeds what would normally be paid for use of the facility,” and whether part of the fee is explicitly for the contest and prizes. Also, whether the venue use is incidental vs. the primary purpose being the contest. | ||
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* Make sure the tournament is actually structured as a contest: participants are competing, prizes are awarded, the fee partly covers the contest costs & prizes. | * Make sure the tournament is actually structured as a contest: participants are competing, prizes are awarded, the fee partly covers the contest costs & prizes. | ||
* Document clearly what portion (if any) of the fee goes towards the contest/prize pool or competition administration. | * Document clearly what portion (if any) of the fee goes towards the contest/prize pool or competition administration. | ||
* If you decide the entry fee is taxable, you’ll need to register for a Texas sales tax permit (if you haven’t already) and collect the tax at the appropriate rate (state + local). Texas Comptroller<ref>{{cite web|title=Texas Comptroller|url=https://comptroller.texas.gov/taxes/publications/96-211.php|publisher=Texas Comptroller|access-date=2025-11- | * If you decide the entry fee is taxable, you’ll need to register for a Texas sales tax permit (if you haven’t already) and collect the tax at the appropriate rate (state + local). Texas Comptroller<ref>{{cite web|title=Texas Comptroller|url=https://comptroller.texas.gov/taxes/publications/96-211.php|publisher=Texas Comptroller|access-date=2025-11-17}}</ref> | ||
* If you decide it fits the exception and is not taxable, it’s good to keep documentation supporting that decision (just in case of audit) — e.g., how the fee was determined, how much is prize pool, how it differs from normal use, etc. | * If you decide it fits the exception and is not taxable, it’s good to keep documentation supporting that decision (just in case of audit) — e.g., how the fee was determined, how much is prize pool, how it differs from normal use, etc. | ||
* In borderline cases (or if you want clarity), you may consider seeking a ruling from the Comptroller or talking to a tax professional. | * In borderline cases (or if you want clarity), you may consider seeking a ruling from the Comptroller or talking to a tax professional. | ||
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Your PDF is ready! | Your PDF is ready! | ||
👉 Click here to download the PDF<ref>{{cite web|title=Click here to download the PDF|url=https://chatgpt.com/share/Click%20here%20to%20download%20the%20PDF|publisher=Click here to download the PDF|access-date=2025-11- | 👉 Click here to download the PDF<ref>{{cite web|title=Click here to download the PDF|url=https://chatgpt.com/share/Click%20here%20to%20download%20the%20PDF|publisher=Click here to download the PDF|access-date=2025-11-17}}</ref> | ||
If you'd like the PDF formatted differently (title page, bullet points, your store name, a logo, or additional detail), I can revise it anytime. | If you'd like the PDF formatted differently (title page, bullet points, your store name, a logo, or additional detail), I can revise it anytime. | ||