Does a nonprofit have to charge Illinois sales tax on admission tickets, food, merchandise, and hospitality sales at a fundraising event?

Plain-English summary

A nonprofit organization (a 501(c)(3)) planning to hold a multi-day event asked the Illinois Department of Revenue how sales tax applies to the various ways it planned to raise money: selling general-admission and premium-pavilion tickets, licensing hospitality tents and suites to corporate clients, selling clothing/programs/souvenirs both on-site and by mail order, selling uniforms to volunteers by mail order, and having exclusive concessionaires and caterers sell food, beverages, and liquor on the organization's behalf.

The Department's answer draws a line based on what is actually being sold. Admission tickets, standing alone, are the sale of an intangible and are not subject to Illinois sales tax (citing 86 Ill. Adm. Code 130.120). But almost everything else in the plan is a sale of tangible personal property and is taxable: food and beverages sold separately from the ticket price, clothing/programs/souvenirs sold at the event or by mail order, and food and beverages provided by caterers to the corporate hospitality tents. Caterers are treated as retailers of tangible personal property, and their entire gross receipts — including add-ons like room charges, corkage fees, linens, and table rentals — are taxable, with no deduction for service or overhead costs.

The letter also flags registration and reporting obligations: anyone selling taxable tangible personal property at retail in Illinois (including concessionaires, caterers, and the organization itself if it makes taxable sales) generally must register with the Department, and sellers at fairs, flea markets, and similar events can be required to file daily sales reports if the Department determines there is a significant risk of revenue loss.

This is a General Information Letter (GIL), so it is not a statement of Department policy and is not binding on the Department — it only points the taxpayer to the relevant regulations rather than resolving the taxpayer's exact facts with binding force.

What this means for you

Nonprofits and event organizers

If you're running a ticketed fundraising event, the admission charge itself is generally not subject to sales tax. But the moment you (or vendors acting for you) sell food, drinks, merchandise, or other tangible goods separately from the ticket — even to raise money for a good cause — those sales are ordinary taxable retail sales. Selling clothing, programs, or souvenirs by mail order doesn't avoid the tax either; the seller is still acting as a retailer subject to the Retailers' Occupation Tax Act.

Concessionaires and caterers working an event

If you're an exclusive concessionaire or caterer hired to sell food, beverages, or liquor at someone else's event, you're a retailer for Illinois sales tax purposes. Your entire gross receipts from the food and beverage sales are taxable — you can't back out service charges, corkage fees, linen rental, or other overhead costs before calculating the tax due. You may also need to register with the Department and could be required to make daily sales reports at multi-day events if the Department flags the event as a revenue risk.

Anyone selling admission-based access vs. tangible goods

The core distinction in this letter is intangible vs. tangible. A ticket that only grants entry (general admission or a premium-pavilion upgrade) is an intangible and untaxed. But as soon as food, beverages, clothing, or other physical goods are sold — whether bundled into a "hospitality" package or sold a la carte — that portion becomes a taxable retail sale.

Businesses licensing event space (tents, suites, corporate hospitality)

The letter doesn't squarely resolve the tax treatment of licensing temporary structures (tables, tents, suites) for corporate hospitality use — it focuses its taxable/non-taxable analysis on tickets, food/beverage, and merchandise. If your business model includes similar space-licensing arrangements, don't assume this letter answers that question; consider seeking your own guidance.

Common questions

Q: Is the admission ticket to our fundraising event subject to Illinois sales tax?
A: No. The Department states that generally the sale of an admission ticket is the sale of an intangible, and intangible personal property is not subject to sales tax, citing 86 Ill. Adm. Code 130.120.

Q: We sell food and drinks separately from the ticket price at our event — is that taxable?
A: Yes. The letter states that if food and beverages are sold separate from the admission price, the sale of that food and those beverages is subject to tax.

Q: Our caterer sells food and liquor to our corporate hospitality tents on our behalf — who owes the tax, and on what amount?
A: The letter treats caterers as retailers of tangible personal property. Tax applies to the caterer's entire gross receipts from the sale, including charges like room fees, corkage fees, special linens, chairs, tables, and similar costs of doing business, with no deduction for service or overhead costs.

Q: Do we or our vendors need to register with the Illinois Department of Revenue to sell at the event?
A: The letter notes that any person selling tangible personal property at retail in Illinois must first obtain a certificate of registration (using Form REG-1), and that persons who promote, organize, or provide retail-selling space for concessionaires at events like fairs and similar exhibitions must file a report with the Department's Special Events Unit. Sellers at fairs, flea markets, and similar events may also be required to make daily sales reports and daily tax payments if the Department determines there is a significant risk of revenue loss.

Q: Is this letter binding on the Department the way a Private Letter Ruling would be?
A: No. The Department explains that this is a General Information Letter (GIL), which directs the taxpayer to relevant regulations but is not a statement of Department policy and is not binding on the Department, unlike a Private Letter Ruling (PLR) issued under the Department's PLR procedures.

Citations and references

• 35 ILCS 105/3 (Use Tax imposed on tangible personal property purchased at retail)
• 35 ILCS 120/2a (certificate of registration required to sell tangible personal property at retail)
• 35 ILCS 120/3 (daily reporting/payment requirement for concessionaires and sellers at fairs, flea markets, and similar events)
• 86 Ill. Adm. Code 130.101 (Retailers' Occupation Tax imposed on gross receipts from retail sales)
• 86 Ill. Adm. Code 130.120 (intangible personal property, including admission tickets, not subject to sales tax)
• 86 Ill. Adm. Code 130.410 (cost of doing business not deductible from gross receipts)
• 86 Ill. Adm. Code 130.2145 (vendors of meals/caterers treated as retailers of tangible personal property)
• 86 Ill. Adm. Code 150.101 (Use Tax on tangible personal property purchased at retail)
• 86 Ill. Adm. Code 150.201(i) (definition of retailer maintaining a place of business in Illinois)
• 86 Ill. Adm. Code 150.801 (registration requirement for retailer maintaining a place of business in Illinois)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2017.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2017/st-17-0028-gil.pdf

Original ruling text

ST 17-0028-GIL 08/14/2017 MISCELLANEOUS
Generally, the sale of an admission ticket is the sale of an intangible. Intangible personal
property is not subject to sales tax. See 86 Ill. Adm. Code 130.120. (This is a GIL.)

August 4, 2017

Dear Xxxxx:
This letter is in response to your letter dated May 23, 2017, in which you requested
information. The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are
issued by the Department in response to specific taxpayer inquiries concerning the application of a
tax statute or rule to a particular fact situation. A PLR is binding on the Department, but only as to the
taxpayer who is the subject of the request for ruling and only to the extent the facts recited in the PLR
are correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in
the Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information
Letter (“GIL”) is to direct taxpayers to Department regulations or other sources of information
regarding the topic about which they have inquired. A GIL is not a statement of Department policy
and is not binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website
at www.tax.illinois.gov to review regulations, letter rulings and other types of information relevant to
your inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
In MONTH, 2018 the ASSOCIATION, an IRC Section 501(c)(3) non-profit organization,
will conduct the inaugural EVENT at PLACE in CITY, IL. The ASSOCIATION will
engage in the following activities while conducting the event:

1. Sell tickets to the general public (daily/weekly options available)
   a. Grounds-General access to the grounds of PLACE
   b. PLACE 1 – General access to the grounds of PLACE & PLACE 1, an air
   conditioned pavilion featuring live EVENT TV coverage. Food & beverage may
   be purchased at an additional price.
2. License the exclusive right to use the space occupied by a temporary structure, i.e.
   tables, tents and suites, for corporate hospitality purposes.
3. Sell clothing, programs & other souvenirs to spectators from temporary structures on
   the golf course.
4. Sell clothing, programs & other souvenirs to corporate clients via mail order.
5. Sell uniforms to volunteers via mail order.
   The ASSOCIATION will contract with an exclusive concessionaire who will provide food
   & beverages to spectators from temporary structures on the golf course. The
   ASSOCIATION will obtain a liquor license and hire the exclusive concessionaire to act
   as agent to sell liquor on the ASSOCIATION’s behalf.
   The ASSOCIATION will also contract with one or two exclusive caterers who will
   provide food & beverages to the corporate clients who are using tables, tents and suites
   for corporate hospitality purposes. The ASSOCIATION will obtain a liquor license and
   hire the exclusive caterer(s) to act as agent to sell liquor on the ASSOCIATION’s behalf.

ST 17-0028-GIL
Page 2
I am asking that you please review the activities above and let me know the taxability of
each.
If you have any questions or need additional information, feel free to contact me.
DEPARTMENT’S RESPONSE:
The Illinois Retailers’ Occupation Tax Act imposes a tax upon persons engaged in this State in
the business of selling tangible personal property to purchasers for use or consumption. See 86 Ill.
Adm. Code 130.101. The tax is measured by the seller's gross receipts from retail sales made in the
course of such business. "Gross receipts" means the total selling price or the amount of such sales.
The retailer must pay Retailers' Occupation Tax to the Department based upon its gross receipts, or
actual amount received, from the sale of the tangible personal property.
In Illinois, Use Tax is imposed on the privilege of using, in this State, any kind of tangible
personal property that is purchased anywhere at retail from a retailer. See 35 ILCS 105/3; 86 Ill. Adm.
Code 150.101. These taxes comprise what is commonly known as "sales tax” in Illinois. If the
purchases occur in Illinois, the purchasers must pay the Use Tax to the retailer at the time of
purchase. The retailers are then allowed to retain the amount of Use Tax paid to reimburse
themselves for Retailers' Occupation Tax which they are required to and do pay to the Department
with respect to the same sale.
An “Illinois Retailer” is one who makes sales of tangible personal property in Illinois. The Illinois
Retailer is then liable for Retailers' Occupation Tax on gross receipts from sales and must collect the
corresponding Use Tax incurred by the purchasers.
Persons who promote, organize, or provide retail-selling space for concessionaires or other
types of sellers at events such as conventions, county fairs, flea markets and similar exhibitions or
events are required to file a report with the Department. Please contact the Department’s Special
Events Unit for more information. The address and contact telephone numbers are included on the
PIO-28, which available on the Department’s website.
Section 3 of the Retailers’ Occupation Tax Act, 35 ILCS 120/3, provides, in part, “[a]ny person
engaged in the business of selling tangible personal property at retail as a concessionaire or other
type of seller at the Illinois State Fair, county fairs, art shows, flea markets and similar exhibitions or
events, or any transient merchants, as defined by Section 2 of the Transient Merchant Act of 1987,
may be required to make a daily report of the amount of such sales to the Department and to make a
daily payment of the full amount of tax due. The Department shall impose this requirement when it
finds that there is a significant risk of loss of revenue to the State at such an exhibition or event. The
Department shall notify concessionaires and other sellers of this requirement. In the absence of
notification by the Department, the concessionaires and other sellers shall file their returns as
otherwise required in this Section.”
Section 2a of the Retailers’ Occupation Tax Act, 35 ILCS 120/2a, makes it unlawful for any
person to engage in the business of selling tangible personal property at retail in Illinois without first
obtaining a certificate of registration from the Illinois Department of Revenue. This applies to all
persons whether they sell at conventions, fairs, swap meets, flea markets, and similar exhibitions or
events. The Department’s business registration form is the REG-1, “Illinois Business Registration
Application.” This form is available on the Department’s website.
Another type of retailer is the retailer maintaining a place of business in Illinois. The definition
of a “retailer maintaining a place of business in Illinois” is described in 86 Ill. Adm. Code 150.201(i).

ST 17-0028-GIL
Page 3
This type of retailer is required to register with the State as an Illinois Use Tax collector. See 86 Ill.
Adm. Code 150.801. The retailer must collect and remit Use Tax to the State on behalf of the
retailer’s Illinois customers even though the retailer does not incur any Retailers' Occupation Tax
liability.
Generally, the sale of an admission ticket is the sale of an intangible. Intangible personal
property is not subject to sales tax. See 86 Ill. Adm. Code 130.120. If food and beverages are sold
separate from the admission price, the sale of that food and those beverages is subject to tax.
Similarly, when sales of clothing, programs, uniforms, and other souvenirs are made, the seller is
acting as a retailer and is subject to the Retailers’ Occupation Tax Act.
For general information regarding vendors of meals (e.g., caterers), please see the
Department’s Regulation “Vendors of Meals” at 86 Ill. Adm. Code 130.2145. In Illinois, caterers are
considered to be retailers of tangible personal property. As a result, tax is imposed on their entire
gross receipts from sale, without any deduction on account of service costs or other overhead costs.
A caterer's gross receipts would include all receipts associated with the caterer’s sale of food and
beverages. It is immaterial that service costs associated with the food and beverages are billed
separately on the invoice.
As a result, when a caterer contracts to provide food and beverages to a customer, the
caterer’s gross receipts will include room charges, corkage fees, cancellation fees, fees for special
linens, chairs and tables, and chairs, dishes, glasses and flowers. Each of these charges is a part of
his overall cost of doing business, and such costs are always includable in his gross receipts. See the
Department’s regulation “Cost of Doing Business Not Deductible” at 86 Ill. Adm. Code 130.410.
Section 3 of the Retailers’ Occupation Tax Act, 35 ILCS 120/3, provides, in part, “[a]ny person
engaged in the business of selling tangible personal property at retail as a concessionaire or other
type of seller at the Illinois State Fair, county fairs, art shows, flea markets and similar exhibitions or
events, or any transient merchants, as defined by Section 2 of the Transient Merchant Act of 1987,
may be required to make a daily report of the amount of such sales to the Department and to make a
daily payment of the full amount of tax due. The Department shall impose this requirement when it
finds that there is a significant risk of loss of revenue to the State at such an exhibition or event. The
Department shall notify concessionaires and other sellers of this requirement. In the absence of
notification by the Department, the concessionaires and other sellers shall file their returns as
otherwise required in this Section.”
I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.
Very truly yours,

Debra M. Boggess
Associate Counsel

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