Entry fees to runs, walks, races, and other customer participation events (for example, golfing, dancing, card-playing) are subject to sales tax as admissions to amusement, athletic, entertainment, or recreational events. The organizers of these events are responsible for paying sales tax on the entry fees.
Items that are provided to the participants free of charge (for example, t-shirts, hats, reusable water bottles) are incidental to the admission. Therefore, the event organizer is responsible for paying sales or use tax on its purchase of these items and cannot purchase them without tax for resale.
If the organizer of the event is a nonprofit organization, the entry fees may be exempt from sales tax under the occasional sales exemption and purchases may be exempt because the organization holds a Certificate of Exempt Status issued by the department. There are certain standards that must be met for this exemption to apply. The standards are explained in
Sales Tax Exemptions for Nonprofit Organizations.
June 16, 2015