Sales Tax Slice: Pride Festivities Could Be a Major Source of Revenue for States

LGBT Pride Flag

June is LGBT Pride Month. This month lesbian, gay, bisexual, transgender, and allied individuals will celebrate in over 100 cities in the U.S. and across the globe. In doing so, they will spenda lot of money. Stateside, this could translate into lots of sales tax revenue.

For example, Chicago Pride revelers cooling off with a Big Gulp will find that a sales tax of 10.25 percent applies to their purchase. This is in addition to the 9-percent Fountain Soft Drink Tax that Chicago imposes on the soft drink syrup purchased by the Boystown 7-11. Thinking about purchasing Target’s Pride-themed apparel for Capital Pride? You may be better off doing your shopping during the earlier Pittsburgh Pride festivities. Pennsylvania exempts clothing from its sales and use tax. The District of Columbia does not.

Admission fees may also vary by jurisdiction. Admission fees for PrideFest Milwaukee will be subject to Wisconsin state and local sales tax. While Texas generally imposes sales tax on admission fees, any admission fees paid to Pride Houston for any of that city’s many Pride events will be exempt from tax, as Texas does not impose tax on admission fees paid to 501(c)(3) nonprofit organizations. Attendees of the Boston Pride Back Bay Block Party will likewise not pay tax on their entry. Massachusetts does not tax any admission fees.

For their part, corporate sponsors may find themselves subject to use tax liability. For instance, Colorado clarifies under 39 Colo. Code Regs. § 26-SR-21 that businesses are subject to use tax on promotional items they give away. So if Coors Light, the namesake of Denver’s 2017 Coors Light PrideFest Parade, decides to import into Colorado rainbow beads and branded schwag to give away to attendees, it will have a use tax liability to deal with. Bud Light, Delta, and others may find themselves in the same position at LA Pride, as will sponsors nationwide, from Olympia to Providence.

Which state’s treasury will benefit the most from Pride Month? Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn.

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