Were charges for guided tours of a choose-and-cut Christmas tree farm subject to Texas sales tax?

Plain-English summary

A choose-and-cut Christmas tree farm charged for guided tours of its facilities. The Comptroller said those tour charges were subject to Texas sales tax. Although the tours provided a valuable educational experience, the letter concluded that they did not appear to be primarily educational.

The letter also addressed group admissions bought by an exempt organization for its members. The farm could accept an exemption certificate instead of tax when the exempt organization purchased the admissions, whether it paid in cash or by organizational check. Admissions bought by the individual participants remained taxable.

What this means for you

A tour does not become nontaxable merely because participants learn something during it. This letter turned on whether the tour was primarily educational. It also distinguished an exempt organization's purchase for its members from admissions purchased by the individual visitors themselves.

Common questions

Were the farm's guided-tour charges taxable? Yes.

Why did the Comptroller tax them? The tours offered educational value but did not appear to be primarily educational.

Could an exempt organization purchase admissions without tax? Yes. The farm could accept an exemption certificate when the organization bought admission for its members.

Did the payment have to be made by organizational check? No. The letter allowed payment by either cash or the organization's check.

What if each participant purchased admission individually? Those admissions were taxable.

Citations and references

No statute or administrative rule was cited in the ruling text.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9102L1071A13

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

JOHN SHARP
Comptroller February 5, 1991

Dear ** :

Thank you for your recent letter regarding tours of your client's
choose and cut Christmas tree farm.

Your client's charges for guided tours of their facilities are sub-
ject to sales tax. The tours no doubt provide a valuable education-
al experience for the participants, but they do not appear to be
primarily educational in nature.

If an exempt organization were to purchase admission for their mem-
bers, your client could accept an exemption certificate in lieu of
tax. The payment could be made either by cash or the organization's
check. Admissions purchased by individual participants would be
subject to tax.

This opinion is based on the facts you presented. Other facts,
though similar, may yield different results.

If you have questions or need more information, please call our toll-
free number 1- 800- 531-5441. My direct line number is 512-463-4680
[FAX (512) 475-0900]. You may write to me in care of Tax Administra-
tion Division.

Sincerely,
Al Van Allen
Tax Administration Division