Were amusement tickets given in exchange for advertising or other promotions subject to South Carolina's admissions tax?

Plain-English summary

South Carolina Revenue Ruling 88-11 addressed whether tickets to a place of amusement, given away in exchange for advertising or other promotions, are subject to the admissions tax. In the facts, a company sponsoring an event exchanged tickets for radio and television advertising and for other promotional purposes.

Section 12-21-2420 levies a 4% license tax on "all paid admissions" to places of amusement, and provides that the tax is paid by the person paying the admission price — which Section 12-21-2410 defines to include an individual, partnership, corporation, association, or organization. The issue was whether exchanging tickets for services counts as a "paid admission."

The Commission concluded that it does. Drawing on the analogous federal admissions tax and Revenue Ruling 64-142 — which held that tickets an organization issued to radio and television stations in exchange for spot announcements and other promotional services were taxed at the full established ticket price, as sales for consideration — the Commission reasoned that payment for an admission can be made in money, goods, or services. The exchange of amusement tickets for radio or television advertising, or other promotions, therefore constitutes a "paid admission" subject to the admissions tax under Section 12-21-2420.

Common questions

Q: Are promotional tickets given away for advertising taxable? Yes, when they are exchanged for value such as advertising or promotional services.

Q: Does 'paid' admission require cash? No. Payment for an admission can be made in money, goods, or services.

Q: Who owes the tax? The person paying the admission price — here, the party providing the advertising or promotion in exchange for the tickets.

Q: What authority did the Commission rely on? The statutory text plus the analogous federal Revenue Ruling 64-142 on tickets exchanged for advertising.

Citations and references

• S.C. Code Ann. § 12-21-2410 (definitions)
• S.C. Code Ann. § 12-21-2420 (4% tax on paid admissions to places of amusement)
• Rev. Rul. 64-142, 1964-1 (Part 1) C.B. 397 (federal treatment of tickets exchanged for advertising)

Subject

Promotional Tickets

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR88-11.pdf

Original ruling text

SC REVENUE RULING #88-11

SUBJECT:

Promotional Tickets
(Admissions Tax)

EFFECTIVE DATE:

Applies to all periods open under statute

REFERENCE:

S.C. Code Ann. Section 12-21-2410 (1976)
S.C. Code Ann. Section 12-21-2420 (1976)

AUTHORITY:

S.C. Code Ann. Section 12-3-170 (1976)
SC Revenue Procedure #87-3

SCOPE:

A Revenue Ruling is the Commission's official interpretation of
how tax law is to be applied to a specific set of facts. A Revenue
Ruling is public information and remains a permanent docu ment
until superseded by a Regulation or is rescinded by a subsequent
Revenue Ruling.

Question:
Is the exchange of tickets to a place of amusement for radio and television advertising, or other
promotions, "paid admissions" subject to the tax, pursuant to Code Section 12-21-2420?
Facts:
A company sponsoring an event will exchange tickets for radio and television advertising.
Tickets will also be exchanged for other promotional purposes.
Discussion:
The issue is whether or not the exchange of tickets for services constitutes a "paid admissions",
subject to the tax.

1

Code Section 12-21-2410 reads:
For the purpose of this article and unless otherwise required by the context:
(1)

The word "admission" means the right or privilege to enter into or use a place or
location;

(2)

The word "place" means any definite enclosure or loca

(3)

The word "person" means individual, partnership, corporation, association or
organization of any kind whatsoever. (emphasis added)

tion; and

Code Section 12-21-2420 reads, in part:
There shall be levied, assessed, collected and paid upon all paid admissions to all places
of amusement within this State a license tax of...four percent....
*

*

*

*

The tax imposed by this section shall be paid by the person or persons paying such
admission price.....
In summary, the tax is upon "all paid admissions" and the person paying the admission, whether
that person is an individual, a partnership, or corporation, is the taxpayer with respect to the tax.
In addition, an Internal Revenue Service Revenue Ruling, 64-142, 1964-1 (Part 1) CB 397, with
respect to the federal admissions tax (repealed 12/31/65), states:
An organization conducts sporting events to which tickets of admission are sold to the
general public at established prices. Occasionally, the organization issues tickets to radio
and television stations in exchange for spot announcements and other promotional
services. Similarly, tickets are issued to newspaper companies in exchange for
advertising space.
Held, the excise tax on amounts paid for admissions to any place, imposed by Section
4231(1) of the Internal Revenue Code of 1954, applied to the full established price of the
tickets exchanged in the manner described (subject to the one dollar exclusion provided
in that section), since these transactions are deemed to be sales of the tickets for a
consideration.
The federal admissions tax "was based on 'the amount paid for admissions to any place.'" 26 RIA
Federal Tax Coordinator [Paragraph] W-11019 (emphasis added)
In summary, the payment for an admissions to a place of amusement can be in money, goods or
services.

2

Conclusion:
The exchange of tickets to a place of amusement for radio or television advertising, or other
promotions, constitutes a "paid admissions" subject to the admissions tax, pursuant to Code
Section 12-21-2420.

SOUTH CAROLINA TAX COMMISSION

s/S. Hunter Howard, Jr.
S. Hunter Howard, Jr., Chairman

s/A. Crawford Clarkson, Jr.
A. Crawford Clarkson, Jr., Commissioner
Columbia, South Carolina
September 21,
, 1988

3