Do admission charges for amusement events at a venue listed in the National Register of Historic Places owe Texas sales tax, and can collected tax on those tickets be refunded?

Subject

Sales Tax Exemption for Amusement Admissions at a National Register Historic Site, and Refund Priority for Taxes Collected on Ambiguous Tickets

Plain-English summary

This is a bundled pair of Comptroller letters (dated April 9 and April 13, 1993) answering related questions from the same or similar requesters about amusement admissions sold at a facility (referred to in the redacted text as "ABC Public Facilities," also called "ABC Historical Park") located in a park that has been listed in the National Register of Historic Places since 1976.

The bottom line: no sales tax is due on admission to an amusement service if it is provided exclusively at a place listed in the National Register of Historic Places (or designated a Recorded Texas Historic Landmark by the Texas Historical Commission). The Comptroller confirmed the venue at issue is on the National Register, so ticket sales for events there — sold either by the venue itself or by a ticket agent/promoter on its behalf — are exempt under Rule 3.298(g) and Tax Code § 151.3101(a)(2).

The first letter also addresses a messier, second question: a promoter and a ticket company wanted a refund of sales tax that had been collected (and remitted to the state) on tickets for these now-exempt events, because the tickets carried the phrase "All taxes included, if applicable." The Comptroller denied a direct refund to the promoter/ticket company, explaining that because the ticket language didn't clearly tell patrons whether tax was or wasn't included, the seller can't just keep or reclaim that money for itself — it must first refund the improperly collected tax to the individual patrons who actually paid it, citing an administrative hearing (Hearing No. 28,104) that reached the same conclusion on similar "all taxes included" ticket/sign language.

What this means for you

Historic venues and event promoters

If your venue is listed in the National Register of Historic Places or is a Recorded Texas Historic Landmark, and amusement services (concerts, tours, events) are provided exclusively there, admission charges are exempt from Texas sales tax under Rule 3.298(g). That exemption also flows through to ticket agents and outlets selling on your behalf — they don't need to collect tax on those admissions either. Tickets and promotional materials should clearly state the admission is "Tax Exempt" or not subject to sales tax, rather than using ambiguous language like "all taxes included, if applicable."

Businesses that already collected tax by mistake

If you collected sales tax on since-exempt admissions using ticket wording that didn't clearly separate tax from the ticket price, you cannot simply claim that money back for your own business. The Comptroller's position in this letter is that the tax must first be refunded to the actual patrons who paid it — only after that can the seller/promoter seek its own refund. Clear, unambiguous tax-exempt signage or ticket language up front avoids this problem entirely.

Accountants and tax professionals

This ruling illustrates the interaction between the narrow amusement-services exemption in Rule 3.298(g)/Tax Code § 151.3101(a)(2) and general refund-claim principles: an ambiguous "taxes included if applicable" disclosure does not establish that the seller (rather than the patron) bore the tax, so the seller isn't automatically entitled to a refund of amounts it collected and remitted. Expect the Comptroller to require proof of refunds to end customers before honoring a promoter-level refund claim in a similar fact pattern.

Common questions

Q: Is admission to an event at a National Register historic site automatically tax-exempt in Texas?
A: Yes, if the amusement service is provided exclusively at a place listed in the National Register of Historic Places (or designated a Recorded Texas Historic Landmark), Rule 3.298(g)(1) and Tax Code § 151.3101(a)(2) exempt the admission from sales tax.

Q: Does the exemption cover ticket agents and outlets, not just the venue itself?
A: Yes. Rule 3.298(g)(2), as described in the letter, extends the exemption to a ticket service, ticket agent, ticket outlet, or other seller of the amusement service when the underlying provider's amusement service is exempt.

Q: If sales tax was mistakenly collected on now-exempt tickets, who gets the refund — the promoter or the patrons?
A: According to this letter, the patrons do, first. Because the tickets here only said "all taxes included, if applicable" — language the Comptroller found ambiguous about whether tax was actually charged — the promoter/ticket company had to refund the tax to individual patrons before it could seek any refund for itself.

Q: Why did the Comptroller cite Hearing No. 28,104?
A: As support for the refund-sequencing rule: in that hearing, involving exempt periodicals sold with "prices include all applicable state and local taxes" signage, the administrative law judge held the seller couldn't hide behind ambiguous "applicable taxes" language to avoid the conclusion that it had, in fact, collected tax that must go back to customers.

Citations and references

Statutes and rules:

• Tex. Tax Code § 151.3101(a)(2) — exempts admissions to amusement services provided at a place designated a Recorded Texas Historic Landmark or included in the National Register of Historic Places.
• 34 Tex. Admin. Code Rule 3.298(g) — Amusement services rule; subsection (g)(1)(F)/(G) exempts admissions at National Register/Historic Landmark venues, and (g)(2) extends that exemption to ticket sellers/agents/outlets.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9304L1235D12

Original ruling text

April 13, 1993

Dear ***:

This is in response to your recent letter requesting whether amusement
events held at the ABC Public Facilities (ABC), also known as ABC
Historical Park, located in ABC Park in *** qualify for
exemption. ABC Public Facilities have been included in the National
Register of Historic Places since 1976. ***** (EFG Co.) were the
promoters of events held at ABC Public Facilities.

Additionally, you are seeking a refund from HIJ Company for sales taxes
collected on events held at ABC during the years within statute.
Preprinted tickets issued by HIJ Company to patrons had/have the
statement on the face of the ticket "All taxes included,, if applicable".
HIJ Company has in the past set aside and remitted to the state what it
believed to be sales taxes.

Section (g) of Rule 3.298 - Amusement services provides in part:

(1) Sales tax is not due on the sale of an amusement service if the service
is provided exclusively:

(F) in a place that is included in the National Register of Historic
Places; or

(G) in a place that is designated as a Recorded Texas Historic Landmark by
the Texas Historical Commission.

(2) Sales tax is not due on the sale of an amusement service by a ticket
service, ticket agent, ticket outlet or any other seller of amusement
services when the provider of the amusement service is exempt as set forth
in paragraph (1) of this subsection.

I have confirmed that ABC is included in the National Register of Historic
Places. Therefore, amusement services held at ABC are exempt from sales
tax under section (g)(1)(F) of Rule 3.298. Tickets sold to events at ABC,
or flyers promoting events at ABC, should state that the admission is
"Tax Exempt" or is not subject to sales tax.

Sales taxes collected from patrons in error for amusement services at
ABC, must be refunded back to the individual patrons, before a refund can
be issued to the promoter of the event.

Hearing No. 28,104, sent to you under separate cover, addressed a similar
situation involving the sale of certain exempt periodicals and writings.
In that situation large signs at seminars where the periodicals and
writings were sold stated "Prices include all applicable state and local
taxes" and sales taxes were collected and remitted on those sales. The
administrative law judge held that claimant could not hide behind its
"applicable taxes" signs to claim it had not collected taxes and that the
claimant did not give its customers clear pronouncement that taxes were
or were not included.

Similarly, in your situation, HIJ Company's tickets stated (and still
state) that taxes were included if applicable, giving patrons no clear
pronouncement as to whether taxes were or were not included.
Additionally, HIJ Company reported sales taxes on these performances to
the state, further supporting the fact that HIJ Company believed these
sales to be taxable.

Based on these two facts, no refund may be made to ABC or EFG Co. unless
and until refunds are made to the purchasers of the admissions.

This opinion is based on the facts presented. Other facts though similar
may provide a different result. If you have other questions or need more
information, you may call me at 1-800-531-5441, extension 3-4502. The
regular number is 512/463-4600. You may also write to Tax Administration
Division at the above address.

Sincerely,

Gilbert Zamora
Tax Administration Division

April 9, 1993

Dear ***:

This is a follow-up to our telephone conversation of April 9, 1993,
concerning the taxability of admissions to amusement services provided
by your firm at the *** or ABC Public Facility (ABC
Historical Park), a place listed in the National Register of Historic
Places.

Texas Tax Code Section 151.3101(a)(2) exempts' from the sales and use tax
admissions to amusement services provided in a place that is designated
as a Recorded Texas Historic Landmark by the Texas Historical Commission
or is included in the National Register of Historic Places.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

You may call toll free 1-800-531-5441, extension 3-4683 if you have any
questions or need more information. You may write to Tax Administration
Division, Comptroller of Public Accounts.

Sincerely,

Eddie C. Washington
Tax Administration Division

NOTE: Previous Accession Number 93050115.L09