Utah: Convenience and Processing Fees Not Part of Sales Price of Admissions

Listen to a brief overview of state tax developments this week, including Utah, or read full Utah development below.

Detailed Utah Development

The Utah State Tax Commission recently ruled that convenience and order processing fees associated with ticket sales made by a third party vendor were not subject to sales tax. The taxpayer, an operator of an event center, sold tickets to the public directly and indirectly through third-party vendors. For tickets purchased through the third-party vendors, a separately stated convenience and order processing fee was charged in addition to the price of the ticket. This fee, which was not imposed if a customer purchased a ticket directly from the event center box office, was split between the vendor and the taxpayer. Under Utah law, sales tax is imposed on the “amounts paid or charged as admission.” The taxpayer argued that the separately-stated fees were associated with a sale of a nontaxable service, rather than taxable admissions. The Commission agreed, finding that because the fees were only charged when a ticket was sold through a third-party vendor, the fees were not amounts paid or charged as admissions. In other words, payment of the fees did “not affect” the use or operation of the admission, but were associated with the service of being able to buy the ticket conveniently. Please contact Michael Larkin at 801-237-1335 with questions on this Tax Commission ruling (Appeal No. 17-1278). 

This Week's Developments

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Sarah McGahan

Sarah McGahan

Managing Director, State & Local Tax, KPMG US