Editor’s Note: This article was updated on 1/6/2020 to reflect changes in penalties for taxes not remitted in a timely manner.
Do you host admissions-based events within the City of Columbus? Then your business might need to be paying the new Admissions Tax.
The Admissions Tax quietly went into effect on July 1, 2019. Supporting Nationwide Arena and the Greater Columbus Arts Council, the Admissions Tax “levies a 5% tax on amounts received as admission to any place located within the City of Columbus.”
The tax hasn’t been without its controversies and discussions, but is now an applicable tax within in the City of Columbus less than a year after it was first announced.
Looking at the tax through the lens of small businesses, in this article we will break down what exactly this tax is, who has to pay it, the exemptions you should know about, and penalties for not paying the tax.
What is the Admissions Tax?
Administered by the Columbus Income Tax Division, the Admissions Tax is split into two ordinances:
- A 5% tax collected at events held within the City of Columbus at venues other than Nationwide Arena
- A 5% tax collected on events held at Nationwide Arena
The tax is split into two ordinances to funnel dollars to two separate sources – the Greater Columbus Arts Council (GCAC) and Nationwide Arena.
What does the Admissions Tax support?
The impetus for the Admissions Tax was led by GCAC to broadly support the arts in Columbus. According to their website:
This investment will make Columbus more competitive with cities like Cleveland, Pittsburgh and Nashville, who we compete with for business, tourism and residents. And this investment means more arts education opportunities for children, more free festivals in our neighborhoods and more support for artists in all disciplines.gcac.org/impact-of-the-arts/columbus-ticket-fee
Several questions were raised when the tax was made public as to why Nationwide Arena is involved in a tax largely levied to support the arts. When first announced in the summer of 2018, Don Brown, executive director of the Franklin County Convention Facilities Authority, the owner and operator of Nationwide Arena, said that the venue’s involvement made sense because it would generate a large portion of the tax revenue. On its own, the publicly-owned stadium has struggled to gain the tax support needed to maintain its facilities.
As mentioned previously, the tax collected from the two ordinances is allocated to two sources:
- The 5% tax on non-Nationwide Arena events is allocated to GCAC to support arts institutions, artists, education, programming, etc.
- Of the 5% tax collected at Nationwide Arena events, 80% is allocated to Nationwide Arena for long-term capital improvements and building maintenance, the remaining 20% of the collected tax is allocated to GCAC.
Admissions Tax Guidelines
Location is the most important factor in determining if the Admissions Tax is applicable to an event. The tax is tied to venues within Columbus City limits. That means if an organization based in Dublin hosts an event in Columbus, the tax is applied. But conversely, if a Columbus-based organization holds an event in Dublin, the tax would not be applied.
The tax is directly tied to venues because there is an exemption based on venue capacity. A venue’s capacity is determined by the occupancy permit for that address.
The Admission Tax applies to a wide range of admissions, including not just one-off events, but season tickets, memberships, packages, subscriptions, movie theater tickets, cover charges and golf course greens fees. (For the purposes of this article, we’re focusing more on admissions charged for events.) If an organization’s event includes service charges, handling fees, food and beverage vouchers, merchandise and/or parking, the 5% tax is only to be applied to the cost of admission.
The person purchasing admission to an event is technically financially responsible for paying the tax, however it is the responsibility of the vendor charging admission to collect and remit the tax. Put simply, if a business is hosting an event, they should add the 5% tax to the price of admission, or the business will be paying that cost out of pocket. (Unless the event meets an exemption – of which there are several. Keep reading.)
Also of note is that the 5% tax does not need to be listed as a separate line item. The tax can be included in the base price of the ticket, with the Tax Division noting most businesses are opting to just increase the price of admission by 5% to cover the tax.
Admission Tax Exemptions
There are a multitude of exemptions to the Admissions Tax both based on transaction details and organizations that the event proceeds benefit. To qualify for an exemption, a business only has to meet one exemption criteria, not multiple.
The two biggest exemptions that will likely apply to, and that are designed not to burden, small business events are:
- Admissions where the charge is $10 or less
- Admissions to an event conducted in a place with a capacity of 400 or less
For example, a business charging $50 for an event at a venue with a capacity of 100 would not have to pay the tax. If a business charged $5 for admission to an event, and the venue has a capacity of 500, the business would not need to collect the tax, either. However, up that admission to $11 and the vendor needs to collect the tax.
The exemptions for venues are based on capacity and not attendance. If an event at a 500-person venue has only 300 people in attendance, the tax still needs to be collected.
The Tax Division says details are still being worked out for events that might not have clearly defined venues or capacities – such as outdoor festivals, shutting down and roping off part of a street for an event, or tour-based events that take place at multiple locations, potentially with stops both inside and outside of the City of Columbus.
The $10 and 400 capacity rules are considered “Exempt Transactions.” Another exemption for small businesses to look out for in this category are events sponsored by the city, which the Tax Division says it’s still defining.
There are also a number of “Exempt Organizations” including when proceeds go exclusively to:
- Government entity acting in a governmental capacity (like the State Fair)
- 501(C) organizations (like events hosted by non-profits – expect for the NCAA and organizations receiving operating support from GCAC)
- Public and private primary education institutions (like a school play)
The Tax Division says that the exemption for 501(C) organizations essentially means that those receiving operating support from GCAC have no exemptions since the tax will likely be benefiting them.
In summary, the $10 or less admissions price or 400 or less venue capacity are likely to be the most common exemptions,
Filing the Admissions Tax
The Admissions Tax currently requires a monthly filing. The tax is due on the 20th of the month for events held in the previous month. For example, the tax for any events held during September 2019 is due on October 20, 2019.
The Tax Division is looking for three things in a business’ record keeping of the tax. That includes records of:
- Taxable admissions sales
- Tax collected
- Exempted sales and the reason they are exempted
There are not any specific requirements on how that information is presented – i.e. a business can continue using whatever accounting system it currently has – as long as those three records are clearly accountable through invoices, accounting statements, etc. As businesses come into compliance and audit details are finalized, there is more flexibility in what counts as a “record.” And, whatever record a business supplies, they should plan on keeping it for the four-year audit window.
Admissions Tax filing is also a paper-based system. There is currently no online filing and payment of the tax, but the Tax Division says they plan to release an RFP for a new filing system.
To file using the current paper-based system, a business or vendor must first create an account by filling out Form H-2, found at columbustax.net. Once a business receives its account information, they will file Form A-1, the Monthly Return of Admissions Tax. The A-1 Form and additional instructions are also available at columbustax.net. The A-1 form collectively covers all events a vendor held during a given month and individual forms do not need to be filed for each event.
UPDATE: As of January 1, 2020 penalties are now enforced for vendors who fail to pay the tax by the 20th of the month deadline.
According to an amendment to the ordinance:
“Any person or vendor who fails to timely file and pay the tax levied under this chapter shall forfeit and pay to the city treasurer a penalty of ten percent (10%) of the tax owed. Should a person or vendor be imposed a penalty under the provisions of this chapter, such imposition shall carry a daily interest rate of one percent (1%) of the total penalty to be compounded and assessed each day the penalty is not paid to the City. Such interest rate stops accruing once all penalties and interest payments are remitted, collected, and deemed as satisfactory.”
The Tax Division strongly encourages business to reach out to them with questions. Businesses can visit the tax office at 77 N. Front St. Monday through Friday from 8 a.m. – 5 p.m. or call at 614-645-7370.
For more information, and to view forms and examples, visit columbus.gov/AdmissionsTax.