SN 91(5)

Amusement and Recreation Services

This publication has been obsoleted by AN 95(3)

PURPOSE: This Special Notice describes the Sales and Use Taxes on amusement and recreation services enacted by 1991 Conn. Pub. Acts 3, §103 (June Spec. Sess.).

EFFECTIVE DATE: Effective upon issuance and applicable to amusement and recreation services provided on or after October 1, 1991.

STATUTORY AUTHORITY: 1991 Conn. Pub. Acts 3, §103 (June Spec. Sess.).

Effective October 1, 1991 Sales and Use Taxes apply at a rate of 6% to the charges for admission to, instruction in, membership in or participation in amusement, recreation or entertainment services included in Major Group 79 in the Standard Industrial Classification ("SIC") Manual, United States Office of Management and Budget, 1987 Edition (hereinafter referred to as "Major Group 79"). Such services must be provided in Connecticut in order to be taxable. Amusement, recreation or entertainment services which are included in a SIC classification other than Major Group 79 are not subject to tax under this section. The service does not have to be the primary activity of the service provider to be taxable.

EXEMPTIONS: Amusement, recreation or entertainment services are not subject to tax when they are provided exclusively by the following entities:

1. the federal government, the State of Connecticut and its municipalities, and its or their respective entities;

2. nonprofit charitable hospitals and charitable, religious or educational organizations holding a Charitable and Religious Organizations Exemption Permit.

NOTE: In order to qualify for this exemption, the entity claiming the exemption must solely assume (or jointly assume with other exempt organizations) the financial risk of the presentation or other provision of the amusement, recreation or entertainment service.

CHARGES SUBJECT TO TAX:

1. ADMISSIONS: "Admission charge" means the amount paid for the right or privilege to have access to a place or location where amusement, entertainment or recreation is provided. The tax is collected on amusement, recreation or entertainment services when the ticket or other admission document is sold, including the sale from a coin-operated machine. The sales tax applies to admission charges which are also subject to the admissions tax under Chapter 225 of the Connecticut General Statutes. However, the sales tax is only on the price of the ticket and is not applied to the Connecticut admissions, cabaret and dues taxes otherwise due.

The sales tax on amusement, recreation or entertainment services applies only where there is a charge for admission by a service provider. The fee charged by an entertainer to a service provider is not subject to tax whether or not an admission charge is made by the service provider. Similarly, fees paid by entertainers to their agents are not subject to tax as an amusement, recreation, or entertainment service, but remain subject to tax as an employment and personnel service.

The provider of an amusement, recreation or entertainment service is the person who has the legal rights of ownership over or the legal right to provide, present or offer an amusement, recreation or entertainment service. Such provider may be the person who owns the facility or place where the amusement, recreation or entertainment service is provided. The provider may also be a person who gains the right to provide the service by virtue of a contract or agreement, such as a lease, rental or concession right, with the owner of the facility or place.

The sales price of an amusement, recreation or entertainment service is the fee charged for admission to an amusement, including a convenience fee, handling charge, service charge, or other amount over and above the amount that would be charged for an amusement admission at the ticket counter of the facility at which the amusement service will be rendered.

Admissions Records and Information

1. When admission to an amusement, entertainment or recreation service is subject to tax, any person who contracts, agrees or otherwise arranges to hold, produce or present an event, entertainment or amusement is deemed the service provider or retailer of the service and as such is required to collect sales tax. Such person must file Form REG-1, Application for Tax Registration Number.

2. Every person who rents, leases or grants a license to use space or facilities to a service provider for the purpose of providing amusement or entertainment services or who agrees to sell admission tickets for a service provider is required to obtain a copy of the seller's permit issued by the Department of Revenue Services to the service provider.

3. Every service provider shall collect the tax on sales of admissions for events, entertainments, or amusements to be held in Connecticut, including exempt organizations described in Conn. Gen. Stat. §12-412(l)(5) or (8) of the Sales and Use Taxes Act which do not assume the financial risk of the presentation or other provision of the amusement, recreation, or entertainment service. The ticket or other right to admission which states the price of the admission shall state the amount of sales tax imposed or contain the words "tax included" or "tax incl." pursuant to Conn. Gen. Stat. §12-408(4).

4. Any person who sells admission tickets or collects admission charges for the service provider is considered the recipient of the admission charges and is the person required to collect and remit the tax; provided, however, that the tax may be turned over to and remitted to the Department of Revenue Services by the service provider if all the following requirements are complied with:

• The ticket sales agent is acting under a written agreement with a service provider which accounts for the sales tax and provides for the tax to be remitted by the service provider;
• The service provider provides the ticket sales agent with a copy of its Connecticut seller's permit;
• The ticket sales agent has no reason to believe the sales tax will not be remitted by the service provider;
• The ticket sales agent maintains records showing the promoters name, address, telephone number, Connecticut seller's permit number, number of tickets sold or admissions granted, gross receipts from ticket sales, sales tax collected for Connecticut, and such other information as the Commissioner of Revenue Services may specify from time to time;
• The Department of Revenue Services has not instructed the ticket sales agent in writing to remit the tax collected for a promoter directly to the state.

5. Any person who sells admission tickets or collects admission charges for providers of amusement, recreation or entertainment services shall, upon request, furnish information to the Department of Revenue Services concerning such Connecticut events, entertainment, recreation or amusements and their service providers.

1. COMPLIANCE: All tickets sold and other admission charges made on or after October 1, 1991 are subject to tax.
2. INSTRUCTION: the fees charged by the provider of instruction in any amusement or recreational activity described in Major Group 79 are subject to Sales and Use Taxes as of October 1, 1991.
3. MEMBERSHIP: membership fees, including dues and initiation fees, for membership in physical fitness facilities and sports and recreation clubs listed in Major Group 79 are subject to sales and use taxes as of October 1, 1991. The sales tax applies to membership fees which are also subject to the dues tax under Chapter 225 of the Connecticut General Statutes. However, the sales tax base does not include the dues tax.
4. PARTICIPATION IN AMUSEMENTS OR RECREATIONAL ACTIVITIES: Charges made for the privilege of participating or engaging in any amusement or recreational activity included in major Group 79 are subject to sales and use taxes as of October 1, 1991, including any separate charge for the rental of any equipment used by the person participating in such activities. This includes any amusement service provided by means of a coin-operated machine used by a consumer.

TRANSITION RULES FOR INSTRUCTION, MEMBERSHIP AND PARTICIPATION IN AMUSEMENT, ENTERTAINMENT AND RECREATIONAL ACTIVITIES:

• Payments before August 22, 1991 for services provided before and after October 1, 1991 are not subject to tax.
• Payments made on or after August 22, 1991 for services provided before and after October 1, 1991 are subject to tax on that portion of the services provided on or after October 1, 1991.
• Payments made on or after August 22, 1991 for services provided on or after October 1, 1991 are fully subject to tax.

SERVICES NOT SUBJECT TO TAX: The following providers of amusement, recreation or entertainment services are included in SIC categories other than Major Group 79 and are not subject to tax under this provision:

• admission charges to indoor and outdoor motion picture theaters.
• admission charges, including cover charges, to establishments serving food and alcoholic beverages which include dinner theaters, cabarets, discotheques, drinking places and night clubs.
• admission charges to museums, art galleries, and botanical and zoological gardens.
• fees to membership organizations including business organizations, professional membership organizations labor unions and organizations, civic, social and fraternal associations, political organizations and religious organizations.
• music lessons.
• recreational vehicle parks, campgrounds and campsites.

The following categories describe the amusement, recreation or entertainment services included in Major Group 79.

1. Admissions charges to places providing amusement or entertainment services:

Dance Halls:

• ballroom dancing, dance halls and discotheques (non-alcoholic).
• theaters:
  
  - ballet performances
  - burlesque shows
  - community theater productions
  - opera performances
  - performing arts center productions
  - plays by road companies
  - plays by stock companies
  - repertory companies
  - summer theaters
  - theatrical companies

• classical music groups or artists
• concert artists
• dance bands
• drum and bugle corps
• entertainers
• jazz performances
• magicians
• orchestras
• performing artists
• popular music groups or artists
• symphony orchestras

• boxing matches
• baseball games
• basketball games
• football games
• ice hockey games
• jai-alai games
• soccer games
• wrestling matches

Race Tracks:

• dog racing
• dragstrip racing
• horse racing
• motorcycle racing
• speedways
• stock car racing

Other amusement or entertainment services:

• aerial tramways, amusement or scenic
• amusement rides
• animal shows in circuses, fairs or carnivals
• bath houses, independently operated
• billiard parlors
• bingo parlors
• card rooms
• carnivals
• circuses
• concessions operators, amusement devices and rides
• exhibitions
• expositions
• fairs, agricultural
• fireworks displays
• gambling establishments, except coin-operated
• game parlors, except coin-operated
• horse shows
• natural wonders, tourist attractions
• observation towers
• off-track betting, admission only
• rodeos
• scenic railroads for amusement
• wax figure exhibitions

Amusement Parks:

• amusement centers and parks, kiddie parks, amusement piers, amusement theme parks.

2. Charges for instruction:

• children's dancing schools
• dance instruction
• dance studios and schools
• professional dancing schools
• baseball instruction schools
• basketball instruction schools
• games, teaching of
• golf professionals
• gymnastics instruction
• judo instruction
• karate instruction
• riding academies and schools
• scuba and skin diving instruction
• skating instruction, ice or roller
• ski instruction
• sports instruction schools and camps
• sports professionals who instruct
• swimming instructors
• tennis professionals

3. Charges for memberships:

Membership sports and recreation clubs:

• aviation clubs
• baseball clubs, amateur
• bathing beaches
• boating clubs
• bowling leagues or teams
• bridge clubs
• membership, sports and recreation
• country clubs
• football clubs, amateur
• golf clubs
• gun clubs
• handball clubs
• hockey clubs, amateur
• hunt clubs
• racquetball clubs
• recreation and sports clubs
• riding clubs
• shooting clubs
• soccer clubs, amateur
• swimming clubs
• tennis clubs
• yacht clubs

4. Charges for participation:

• amusement device parlors
• amusement machines
• arcades
• gambling machines
• juke boxes
• mechanical games
• music distribution systems
• pinball machines
• slot machines
• video games

• aerobic dance and exercise classes 
• exercise salons
• fitness salons
• gymnasiums
• health clubs
• physical fitness centers
• reducing facilities, physical fitness without lodging
• slenderizing salons
• spa, health fitness, except resort lodges

• archery ranges
• batting cages
• boats, fishing parties
• boat rental, pleasure
• cable lifts, amusement or scenic
• day camps
• fishing piers and lakes
• gambling machines, except coin-operated
• go-cart raceways
• golf courses, miniature
• golf courses, public
• golf driving ranges
• golf, pitch-n-putt
• houseboat rentals
• ice skating rinks, public skating only
• picnic group operations
• ping pong parlors
• pool parlors
• racquetball courts
• riding stables
• river rafting
• roller skating
• shooting galleries
• shooting ranges
• skeet shooting facilities
• ski lifts, cable lifts and tows
• slot-car racetracks
• swimming pools, nonmembership
• tennis clubs, nonmembership
• trampoline operation
• trapshooting facilities, nonmembership
• waterslides

• astrologers
• betting information services
• bookies and bookmakers
• fortune tellers
• hunting guides
• lifeguard services
• lotteries and lottery clubs

• bicycle rental
• canoe rental
• golf-cart rental
• moped rental
• motorcycle rental
• rental of beach chairs and accessories
• rental of rowboats
• rental of saddle horses
• rental of rodeo animals
• ski rental 

SN 91(5)
Sales and Use Taxes
Issued 9/91