States are continually looking for ways to raise revenues. One source of state revenue that is often overlooked by the public is taxes on admissions and services. But determining which types of admission charges or services are subject to tax can be a “high-wire act” on its own because these tend to vary from state to state.

Recently, New York issued an advisory opinion on the taxability of various activities by a circus trapeze artist. The artist requested advice on whether she had to pay New York sales tax in the following circumstances:

 1. When hired as an independent contractor by dance schools or not-for-profit organizations to “instruct beginning and intermediate aerial skills.”

2. When hired to perform at functions by event planners that are themselves hired by individuals or companies to plan functions, such as parties and conventions.

3. When hired to perform aerial skills directly by people hosting private parties.

4 When hired by aerial groups as a subcontractor performer.

5. When hired by other aerial groups who charge admissions to perform for the public.

6. When performing directly for the public and charging an admission.

New York law imposes sales tax on certain enumerated services. The first five services listed above are not enumerated, and therefore are not subject to sales tax, according to the opinion.

However, New York law does impose sales tax on admission charges over ten cents to any place of amusement with a few exceptions, including live dramatic, musical, or circus performances. 

Live dramatic and musical arts performances do not include variety shows, magic shows, circuses, animal acts, ice shows, aquatic shows and similar performances, according toNew York regulations. A circus is a unique form of entertainment with multiple acts consisting primarily of feats of physical skill, strength and daring, interspersed with clowns for comic relief and sometimes trained animals, according to an earlier opinion.

 New York concluded, based upon the facts provided, that the aerial performances directly for the public for which the petitioner charges admission do not constitute either a live dramatic and musical arts performance or a circus and therefore are subject to sales tax.

For additional information about state taxation of admission charges, see Bloomberg BNA’s  Sales and Use Tax Navigator.

By Nancy Emison

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