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Thu December 19, 2013
Nonprofits Struggling to Interpret Sales Tax Expansion To Tickets
Non-profits in the Cape Fear region are scrambling to figure out what changes to state tax laws will mean for them.
Poised to take effect January 1st, the sales tax expansion means that buying tickets to events, museums, and cultural sites, will cost more. But the tax won’t apply immediately to all events.
The sales tax expansion, passed by the North Carolina General Assembly earlier this year, means that tickets for entertainment – movies, plays, musicals, concerts – sporting events – even garden tours, house tours or benefit galas -- will be subject to an additional 4.75% tax plus a New Hanover County tax of 2.25%. The local tax is just 2% in surrounding counties. That adds 7% to the price of a ticket.
But there is a grandfather clause in the law, says Tony Rivenbark, Thalian Hall’s Executive Director, which means that some ticket buyers won’t see the tax until September.
“Because the tickets that have already been on sale – which is most of the events by the Main Attractions, Thalian Hall, the Thalian Association, the Opera House Theater Company -- those tickets are already on sale for this season which will not end until end of summer.”
Those events on sale before 2014 won't be subject to the sales tax, as long as the event has sold one ticket. When season tickets come into play, that's already happened.
That sales tax exclusion doesn’t apply, however, to events that are not live – such as movies at for-profit theaters, according to a spokesman with the Department of Revenue. Even if the ticket is purchased before the end of 2013, if the screening is in 2014, the new tax will apply.
But here’s another complicating twist to the new law: that rule won’t apply to a non-profit film event – such as Cinematique.
Proceeds from Cinematique benefit both Thalian Hall Center for the Performing Arts and WHQR.