Is a Texas travel group's lump-sum charge (event ticket plus hospitality access) for an out-of-state amusement event, like the Ryder Cup, subject to Texas sales tax?

Plain-English summary

A group organized to travel to and attend the following year's Ryder Cup golf tournament in Massachusetts charged each of its members a single lump-sum fee that included both a ticket to the event and access to hospitality functions. All aspects of the event itself — the tournament and hospitality functions — were held entirely outside Texas.

The Comptroller confirmed no Texas sales tax is due on that lump-sum charge. Under Rule 3.298(e)(1), Texas doesn't tax amusement services when the event or the location of the service is outside the state. Because the group organizing and selling the packages was based in Texas but the underlying event was entirely out-of-state, the sourcing rule follows the event location, not where the package was sold or organized from.

What this means for you

Travel and event package organizers based in Texas

If you sell a package (tickets plus hospitality/amenities) for an amusement event that's held entirely outside Texas, you generally don't need to charge Texas sales tax on that package, even if your organization and your customers are Texas-based — what controls is where the amusement event itself takes place.

Accountants and tax professionals

Rule 3.298(e)(1)'s location-of-the-event sourcing rule is the key mechanic here: amusement services are sourced to where the event happens, not to the seller's or buyer's location. Useful for any client packaging out-of-state sporting events, concerts, or similar amusement experiences.

Common questions

Q: Does a Texas-based seller need to collect Texas sales tax on a ticket/hospitality package for an event held entirely out of state?
A: No, per this letter, under Rule 3.298(e)(1) — the amusement event's location, not the seller's or buyer's location, controls.

Q: Would the answer change if part of the event were held in Texas?
A: This letter only addresses a scenario where the entire event and all hospitality functions were out of state; it doesn't address a partially in-state event.

Citations and references

Statutes and rules:

• 34 Tex. Admin. Code Rule 3.298(e)(1) (amusement services — no Texas tax when the event/service location is outside Texas)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9811952L

Original ruling text

November 5, 1998

Dear Mr. **:

This is to confirm our discussion of last month concerning the lump-sum charge
for an amusement event occurring out of state.

Your client, **, is a group organized to attend next years Ryder
cup in Massachusetts. Each member of the group is being charged a lump-sum
charge that includes a ticket to the event and entry to hospitality functions.
All aspects of the event will be held out of state.

You are correct that under Rule 3.298(e)(1), no Texas sales tax is due because
the event or location of the service is outside Texas.

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

You may call me toll free at 1-800-531-5441, ext. 3-4675. The direct line is
(512) 463-4675. You also may write to Tax Policy Division, Comptroller of
Public Accounts. You may also e-mail our tax help section at:
[email protected]>

Sincerely,

Tom Soto
Tax Policy Division