Were tickets to a nonprofit ballet company's Georgia performance exempt from sales tax under the temporary fine-arts admission exemption?

Plain-English summary

A federally tax-exempt performing organization arranged to present a ballet at a Georgia performing-arts theater. The theater's box office sold the tickets without separately stating or collecting sales tax, then paid the organization the net proceeds after contract expenses.

Admission tickets are normally retail sales under Georgia law. But the ruling applied a temporary exemption, effective April 25, 2017 through July 1, 2020, for qualifying fine-arts performances or exhibitions performed by, or in a facility owned by, an eligible tax-exempt arts organization or museum.

The Department found the tickets exempt because:

• ballet was expressly included within "fine arts";
• the performer was exempt under I.R.C. § 501(c)(3); and
• its primary mission served a Georgia community through arts education, fine-arts performances, and preservation and continuation of ballet.

Because the exemption was time-limited by the statute described in the ruling, this page reports the historical answer for that performance and does not claim the same treatment applies today.

What this means for you

Performing-arts organizations

The ruling required more than nonprofit status. The performance had to fall within the statutory fine-arts category, and the performing organization or qualifying facility owner had to meet the specified mission test.

Ticket sellers and venues

Admission charges are retail sales unless an exemption applies. Confirm the law in force for the performance date before deciding not to collect tax; the exemption applied here had a stated July 1, 2020 endpoint.

Common questions

Q: Why did the ballet count as fine arts?

A: O.C.G.A. § 48-8-3(100), as described in the ruling, expressly included ballet within the fine-arts definition.

Q: Was being a 501(c)(3) enough by itself?

A: No. The Department also evaluated the organization's primary mission and found that its arts education, performances, and ballet-focused work met the statutory mission requirements.

Q: Were admission tickets normally taxable retail sales?

A: Yes. The ruling says sales of tickets or charges for admission to entertainment are retail sales, absent a specific exemption.

Q: Does this ruling show ballet tickets are exempt now?

A: No. The letter says the applied exemption ran from April 25, 2017 until July 1, 2020. Current transactions require current-law review.

Q: Can another arts organization rely on this ruling?

A: No. It applies only to the requesting taxpayer, performance, mission, and facts, and later statutory or factual changes may change the result.

Citations and references

Authorities:

• O.C.G.A. § 48-8-2(31) -- retail sales include admission tickets and charges
• O.C.G.A. § 48-8-3(100) -- temporary fine-arts admission exemption applied in the ruling
• O.C.G.A. § 48-8-30(a) -- sales and use tax imposition
• I.R.C. § 501(c)(3) -- federal tax-exempt status
• Georgia Department of Revenue Policy Bulletin SUT-2017-07 -- fine-arts guidance cited by the Department

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2017-18

Original ruling text

Georgia Letter Ruling Number: LR SUT-2017-18
Topic: Admission Charges
Date Issued: December 14, 2017
This letter is in response to your request for guidance on the application of Georgia sales and use tax to sales of tickets
for admission to certain performances.
Facts Presented by Taxpayer
Pursuant to section 501(c)(3) of the Internal Revenue Code of 1986, as amended (“I.R.C.”), [Redacted] (“Taxpayer”)
is exempt from federal income taxation.
[Redacted] (the “Theater Owner”) owns and operates [Redacted] (the “Theater”), a performing arts venue in Georgia.
The Theater Owner is a nonprofit corporation, which is exempt from federal income taxation under I.R.C. § 501(c)(3).
The Theater Owner leases the Theater to third parties, such as Taxpayer, for the presentation of performances.
The Theater Owner and Taxpayer entered an agreement whereby Taxpayer has agreed to perform in the Theater a
production (the “Performance”). Tickets are being sold for admission to the Performance. Tickets sales are handled
through the Theater’s box office. The Theater provides to Taxpayer the net proceeds from ticket sales, less any
expenses to be paid to the Theater and others, as provided by contract. Tickets for the Performance bear a charge for
admission and do not reflect any amount of sales tax. As such, sales tax is not being collected from customers.
Issue
Are sales of tickets for admission to the Performance subject to Georgia sales and use tax?
Analysis
Georgia levies and imposes a tax (subject to certain specific exemptions) on the retail purchase, retail sale, storage,
use, or consumption of tangible personal property, certain enumerated services, and utilities. 1 “Retail sale” means any
sale, lease, or rental for any purpose other than for resale, sublease, or subrent. The term “retail sale” includes sales of
tickets, fees, or charges made for admission to places of amusement, sports, or entertainment including, but not limited
to, any place at which any exhibition, display, amusement, or entertainment is offered to the public or any other place
where an admission fee is charged.2
From April 25, 2017 until July 1, 2020, sales of tickets, fees, or charges for admission to certain fine arts performances
or exhibitions are exempt from sales and use tax.3 To satisfy the requirements of this exemption, the fine arts
performance or exhibition must be performed or exhibited by, or within a facility owned by, a tax exempt 501(c)(3)
organization or a museum of cultural significance, if such organization’s or museum’s primary mission is to advance
the arts in this state and to provide arts, educational, and culturally significant programming and exhibits for the benefit
and enrichment of the citizens of this state. As used in this exemption, “fine arts” includes ballet, dance, and music
performed by a symphony orchestra. 4
In this case, Taxpayer does not dispute that sales of tickets to the Performance are retail sales since the tickets are for
admission to a place where entertainment is offered. To determine whether the sales of tickets at issue fall within the
above exemption, the Department must consider the nature of the Performance as well as Taxpayer’s status and
mission. The Performance is a ballet, which Georgia law expressly includes in the definition of “fine arts.” Thus, the
Performance is a qualifying fine arts performance. Taxpayer, the performing entity, is an organization exempt from
taxation under I.R.C. § 501(c)(3). Further, Taxpayer’s mission is to serve a Georgia community by providing arts
education, a range of fine arts performances, honor the past, and contribute to the legacy of ballet. Accordingly,
Taxpayer’s status and mission satisfy the remaining requirements set forth in the exemption.
1

O.C.G.A. §§ 48-8-1, 48-8-2(31)(A), and 48-8-30(a).
O.C.G.A. § 48-8-2(31).
3
O.C.G.A. § 48-8-3(100).
4
Id.; Georgia Department of Revenue Policy Bulletin SUT-2017-07.
2

Georgia Letter Ruling Number: LR SUT-2017-18
Topic: Admission Charges
Date Issued: December 14, 2017
Page 2 of 2

Ruling
Because Taxpayer’s Performance is a fine arts performance that is performed by a tax exempt 501(c)(3) organization
with a primary mission that falls within the requirements set forth in O.C.G.A. § 48-8-3(100), sales of tickets for
admission to Taxpayer’s Performance are exempt from sales and use tax.
The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances and taxpayer in question. The facts herein are those presented by the
taxpayer and the Department accepts them as true for this ruling. If the facts presented herein change, are not true,
are different, or material facts have been omitted, the conclusions reached in this ruling may change. In addition,
subsequent statutory or administrative rule changes or judicial interpretations of the statutes or rules upon which this
advice is based may subject similar future transactions to a different tax treatment than that expressed in this ruling.