Was a mandatory city or county tax included in the amount subject to South Carolina admissions tax under RR 97-13?

Plain-English summary

South Carolina Revenue Ruling 97-13 treated a mandatory city or county tax as part of the amount paid for admission to a theater, golf course, water park, or other place of amusement.

Because every patron had to pay the local tax to enter or use the place, the business could not deduct that tax when calculating the state admissions tax. The result was the same whether the locality imposed the tax on the amusement business or directly on the customer and used the business as collection agent.

The ruling distinguished optional or transaction-specific charges discussed in earlier guidance. Its core test was what every patron had to pay for the right to enter or use the amusement place.

Common questions

Q: Did separately stating the local tax remove it from paid admissions? No. The ruling focused on whether payment was mandatory, not how the charge appeared.

Q: What if the business was only collecting the local tax for the government? The ruling still included the amount because the patron had to pay it to enter or use the place.

Q: Did every ticket-service charge count? The ruling cited earlier guidance distinguishing charges required of all patrons from charges imposed only for remote or credit-card purchases.

Q: Is the five-percent rate current? This page establishes only the rate quoted in the 1997 ruling.

Citations and references

• S.C. Code Ann. §§ 12-21-2410 and 12-21-2420 (admission definition and tax quoted)
• S.C. Code Ann. Title 6, Chapter 1, Article 3; Act 138 of 1997 (local-tax limitations noted)
• SC Revenue Rulings #90-10 and #94-3; SC Technical Advice Memorandum #89-26; Commission Decisions L-D-25 and 91-43 (mandatory-charge guidance cited)

Subject

Local Taxes – “Paid Admissions”

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR97-13.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214

SC REVENUE RULING # 97-13

SUBJECT:

Local Taxes – “Paid Admissions”
(Admissions Tax)

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous documents and any oral directives in conflict
herewith.

REFERENCES:

S. C. Code Ann. Section 12-21-2410 (1976)
S. C. Code Ann. Section 12-21-2420 (1976; Supp. 1996)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Supp. 1996)
SC Revenue Procedure #97-8

SCOPE:

A Revenue Ruling is the Department of Revenue's official
advisory opinion of how laws administered by the Department
are to be applied to a specific issue or a specific set of facts,
and is provided as guidance for all persons or a particular
group. It is valid and remains in effect until superseded or
modified by a change in the statute or regulations or a
subsequent court decision, Revenue Ruling or Revenue
Procedure.

Question:
Is a local tax, as described in the facts, charged by a business to a customer as part of the
amount paid to enter into or use a place of amusement a part of “paid admissions” and
subject to the state admissions tax?
Conclusion:
A local tax, as described in the facts, charged by a business to a customer as part of the
amount paid to enter into or use a place of amusement is a part of “paid admissions” and
subject to the state admissions tax. The local tax is subject to the state admissions tax
regardless of whether the local tax is imposed by the city or county upon the business or
upon the customer with the business serving as a collection agent for the city or county.

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Facts:
Cities and counties are imposing local taxes upon businesses that charge to enter into or
use a place of amusement, such as a theater, golf course, or a water park. The taxes are
generally incorporated into the charge for admissions. For example, a charge to play golf
includes the local tax as well as the 5% state admissions tax. However, some taxes are not
incorporated into the charge and are added to the advertised price at the time the player
pays. As such, when the player arrives at the course, the state admissions tax and the local
tax are added to the charge in much the same manner as a merchant adds the sales tax to
the price of the merchandise being sold.
Questions have arisen as to whether these local taxes on businesses that operate places of
amusements are includable in “paid admissions,” and therefore, subject to the state
admissions tax. More specifically, if the total amount paid includes the green fee, the state
admissions tax and the local tax, is the state admissions tax based on a paid admission of
the green fee plus the local tax or is the state admissions tax based on a paid admission of
the green fee only.
Discussion:
The issue is whether or not the local tax, as described in the facts, is a part of the "paid
admissions" subject to the state admissions tax.
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 location; and
(3) The word "person" means individual, partnership, corporation,
association or organization of any kind whatsoever.
Code Section 12-21-2420 reads, in part:
There must be levied, assessed, collected and paid upon paid admissions to
places of amusement within this State a license tax of five percent.
*

*

*

*

The tax imposed by this section shall be paid by the person or persons
paying such admission price.....
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In summary, the tax is upon "paid admissions" and the person paying the admission is the
taxpayer with respect to the tax, whether that person is an individual, a partnership, or
corporation. Furthermore, “paid admissions” constitute the amounts paid by patrons to
enter into or use a place of amusement.
Over the years, the Department of Revenue has reviewed several times the issue of what
charges are includable in “paid admissions.” Essentially, the determination is based on
what the patron must pay to enter into or use a place of amusement.
In Commission Decisions L-D-25 and 91-43 and in SC Technical Advice Memorandum

89-26, the department reviewed the issue of whether “seat charges” assessed by an

auditorium on all tickets were includable in “paid admissions.” These “seat charges”
were used for capital improvements or to pay off bonds and were imposed by the
governing board of the auditorium - a political subdivision of the state. The department
determined that such charges were includable in “paid admissions” and subject to the
state admissions tax since patrons were required to pay the seat charge in order to enter
into or use the place of amusement.
In SC Revenue Ruling #90-10 the department reviewed the issue of whether service
charges imposed by computerized ticket sales companies or credit card processing fee
imposed on persons using a credit card to purchase tickets were includable in “paid
admissions.” These charges were only imposed on persons who purchased tickets
through a computerized ticket sales company or purchased tickets via a credit card. The
department determined that such charges were includable in “paid admissions” and
subject to the state admissions tax if all persons entering the event were required to pay
these charges. Such charges were not includable in “paid admissions” and therefore not
subject to the state admissions tax if only persons purchasing tickets at remote outlets or
by credit card were required to pay these charges. The department reached a similar
conclusion in SC Revenue Ruling #94-3 with respect to a “handling fee” charged by a
place of amusement for a “restaurant package.”
Finally, Commission Decision #91-43 provides further guidance in its review of Code
Section 12-21-2420 in determining that “seat charges” were includable in “paid
admissions.” The department held:
Our determination on this matter is in keeping with the intent of the General
Assembly. Section 12-21-2420 provides certain exclusions from the
admissions tax. Among these is that provision which states:

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... The tax imposed by this section shall not apply to any amount
separately stated on the ticket of admission for the repayment of
money borrowed for the purpose of constructing an athletic stadium
or field by any accredited college or university ...
The above exclusion describes a situation very similar to the present one,
i.e., separate charges used to retire a debt arising from the construction of
recreation facilities. Thus, the enactment of this exclusion indicates the
Legislature considered these types of charges to be taxable as paid
admission under 12-21-2420. If this were not so, there would have been no
need to enact the said exclusion. (Emphasis added.)
Based on the above, a local tax imposed by a city or county upon businesses that charge
to enter into or use a place of amusement is a part of “paid admissions” and therefore
subject to the state admissions tax. In addition, a local tax imposed by a city or county
upon customers of such businesses, whereby the businesses are merely collection agents
for the city or county, is also a part of “paid admissions” and therefore subject to the state
admissions tax. A local tax may not be deducted from the total amount paid by the
patron in calculating the state admissions tax since all patrons must pay the local tax in
order to enter into or use the place of amusement.

Note: The General Assembly, during its 1997 session, placed certain limitations on
the authority of a city or county to impose a tax. For information on this matter, see
Article 3 of Chapter 1 of Title 6 of the South Carolina Code of Laws (Act 138 of
1997).

SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Burnet R. Maybank III

Burnet R. Maybank, III, Director

Columbia, South Carolina
September 16
, 1997

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