Sales Tax Slice: National Park Service Centennial Provides Opportunity to Ponder Sales Tax

The National Park Service turns 100 years old next weekend and is offering visitors free admission to celebrate.  What better way to join the grand centennial celebration than to ponder sales tax?

In general, states tend to impose sales tax on most admission charges.  For example, if you visit your local Six Flags for one last vacation before the school year returns, you can expect to pay sales tax on the entrance fee.  On the other hand, states generally exempt sales by a government seller.  So, if you were to buy a Federal Recreation Pass to gain admission to your favorite national park, you would not need to pay sales tax because the federal government is selling the pass to you.

What about parking fees?  The analysis is typically similar, as the fee you pay to park your vehicle at a venue is arguably a type of admission fee.  So, you can expect that a state would treat Six Flags’ parking fees differently than, say, Shenandoah National Park’s.  That was not the case recently in Connecticut, however.  Connecticut began imposing sales tax on parking fees at state parks last July.  It was a contentious change, and Connecticut eased into it by first imposing the new tax only at three shoreline parks, waiting until later to impose it at other state park locations.  Facing push-back from interested nonprofit organizations and some negative press coverage, Connecticut eventually reversed course and removed the tax this March.

Lastly, what about souvenirs or other things you might buy at a state or national park?  States tend to treat those transactions the same as any others, regardless that they occur at a government park.  For example, California can impose sales tax on concessions sold at retail on park property, as that state’s Supreme Court decided nearly 80 years ago in Yosemite Park & Curry Co. v. Johnson.  Likewise, California can impose sales tax on gasoline sold on park property, as decided in Standard Oil Company of California v. Johnson on the same day.

So, when you next visit a state or national park, consider taking a moment to appreciate not only the majesty and beauty of the natural world, but also the complexity and nuance of sales tax.

Continue the discussion on LinkedIn: How should states address the sales tax implications of state and national parks?

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By Ryan J. Voorhees