This Special Notice has been obsoleted by AN 95(3)
Amusement and Recreation Services
PURPOSE: This Special Notice describes the Sales and Use Taxes on amusement and recreation services enacted by 1991 Conn. Pub. Acts 3, §103 (June Spec. Sess.).
EFFECTIVE DATE: Effective upon issuance and applicable to amusement and recreation services provided on or after October 1, 1991.
STATUTORY AUTHORITY: 1991 Conn. Pub. Acts 3, §103 (June Spec. Sess.).
Effective October 1, 1991 Sales and Use Taxes apply at a rate of 6% to the charges for admission to, instruction in, membership in or participation in amusement, recreation or entertainment services included in Major Group 79 in the Standard Industrial Classification ("SIC") Manual, United States Office of Management and Budget, 1987 Edition (hereinafter referred to as "Major Group 79"). Such services must be provided in Connecticut in order to be taxable. Amusement, recreation or entertainment services which are included in a SIC classification other than Major Group 79 are not subject to tax under this section. The service does not have to be the primary activity of the service provider to be taxable.
EXEMPTIONS: Amusement, recreation or entertainment services are not subject to tax when they are provided exclusively by the following entities:
1. the federal government, the State of Connecticut and its municipalities, and its or their respective entities;
2. nonprofit charitable hospitals and charitable, religious or educational organizations holding a Charitable and Religious Organizations Exemption Permit.
NOTE: In order to qualify for this exemption, the entity claiming the exemption must solely assume (or jointly assume with other exempt organizations) the financial risk of the presentation or other provision of the amusement, recreation or entertainment service.
CHARGES SUBJECT TO TAX:
1. ADMISSIONS: "Admission charge" means the amount paid for the right or privilege to have access to a place or location where amusement, entertainment or recreation is provided. The tax is collected on amusement, recreation or entertainment services when the ticket or other admission document is sold, including the sale from a coin-operated machine. The sales tax applies to admission charges which are also subject to the admissions tax under Chapter 225 of the Connecticut General Statutes. However, the sales tax is only on the price of the ticket and is not applied to the Connecticut admissions, cabaret and dues taxes otherwise due.
The sales tax on amusement, recreation or entertainment services applies only where there is a charge for admission by a service provider. The fee charged by an entertainer to a service provider is not subject to tax whether or not an admission charge is made by the service provider. Similarly, fees paid by entertainers to their agents are not subject to tax as an amusement, recreation, or entertainment service, but remain subject to tax as an employment and personnel service.
The provider of an amusement, recreation or entertainment service is the person who has the legal rights of ownership over or the legal right to provide, present or offer an amusement, recreation or entertainment service. Such provider may be the person who owns the facility or place where the amusement, recreation or entertainment service is provided. The provider may also be a person who gains the right to provide the service by virtue of a contract or agreement, such as a lease, rental or concession right, with the owner of the facility or place.
The sales price of an amusement, recreation or entertainment service is the fee charged for admission to an amusement, including a convenience fee, handling charge, service charge, or other amount over and above the amount that would be charged for an amusement admission at the ticket counter of the facility at which the amusement service will be rendered.
Admissions Records and Information
1. When admission to an amusement, entertainment or recreation service is subject to tax, any person who contracts, agrees or otherwise arranges to hold, produce or present an event, entertainment or amusement is deemed the service provider or retailer of the service and as such is required to collect sales tax. Such person must file Form REG-1, Application for Tax Registration Number.
2. Every person who rents, leases or grants a license to use space or facilities to a service provider for the purpose of providing amusement or entertainment services or who agrees to sell admission tickets for a service provider is required to obtain a copy of the seller's permit issued by the Department of Revenue Services to the service provider.
3. Every service provider shall collect the tax on sales of admissions for events, entertainments, or amusements to be held in Connecticut, including exempt organizations described in Conn. Gen. Stat. §12-412(l)(5) or (8) of the Sales and Use Taxes Act which do not assume the financial risk of the presentation or other provision of the amusement, recreation, or entertainment service. The ticket or other right to admission which states the price of the admission shall state the amount of sales tax imposed or contain the words "tax included" or "tax incl." pursuant to Conn. Gen. Stat. §12-408(4).
4. Any person who sells admission tickets or collects admission charges for the service provider is considered the recipient of the admission charges and is the person required to collect and remit the tax; provided, however, that the tax may be turned over to and remitted to the Department of Revenue Services by the service provider if all the following requirements are complied with:
5. Any person who sells admission tickets or collects admission charges for providers of amusement, recreation or entertainment services shall, upon request, furnish information to the Department of Revenue Services concerning such Connecticut events, entertainment, recreation or amusements and their service providers.
TRANSITION RULES FOR INSTRUCTION, MEMBERSHIP AND PARTICIPATION IN AMUSEMENT, ENTERTAINMENT AND RECREATIONAL ACTIVITIES:
SERVICES NOT SUBJECT TO TAX: The following providers of amusement, recreation or entertainment services are included in SIC categories other than Major Group 79 and are not subject to tax under this provision:
The following categories describe the amusement, recreation or entertainment services included in Major Group 79.
1. Admissions charges to places providing amusement or entertainment services:
Bands, orchestras and other entertainers and entertainment groups:
Professional or semi-professional sports:
Other amusement or entertainment services:
2. Charges for instruction:
3. Charges for memberships:
Membership sports and recreation clubs:
4. Charges for participation:
Bowling centers including candle pin, duck pin and ten pin.
Coin-operated amusement devices:
Physical fitness facilities: (already subject to tax under Section 12-407(2)(i)(R))
Other amusement, recreation or entertainment services listed in Major Group 79:
Certain services listed in Major Group 79 are integrally related to the leasing or rental of tangible personal property and continue to be subject to Sales and Use Tax for the leasing and rental of such property and not as the sale of a service:
PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.
FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.
Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.