North Carolina § 105-164 - 4G. Entertainment activity.

§ 105-164. 4G. Entertainment activity.

Repealed by Session Laws 2019-246, s. 4(i), effective February 1, 2020, and applicable to sales occurring on or after that date. Tax. - The gross receipts derived from an admission charge to an entertainment activity are taxed at the general rate set in G.S. 105-164.4. The tax is due and payable by the retailer in accordance with G.S. 105-164.16. For purposes of the tax imposed by this section, the retailer is the applicable person listed below: The operator of the venue where the entertainment activity occurs, unless the retailer and the admission facilitator have a contract between them allowing for dual remittance, as provided in subsection (d) of this section. The person that provides the entertainment and that receives admission charges directly from a purchaser. A person other than a person listed in subdivision (1) or (2) of this subsection that receives gross receipts derived from an admission charge sold at retail. Admission Facilitator. - An admission facilitator must report to the retailer with whom it has a contract the admission charge a consumer pays to the admission facilitator for an entertainment activity. The admission facilitator must send the retailer the portion of the gross receipts the admission facilitator owes the retailer and the tax due on the gross receipts derived from an admission charge no later than 10 days after the end of each calendar month. An admission facilitator that does not send the retailer the tax due on the gross receipts derived from an admission charge is liable for the amount of tax the admission facilitator fails to send to the retailer. An admission facilitator is not liable for tax sent to a retailer but not remitted by the retailer to the Secretary. Tax payments received by a retailer from an admission facilitator are held in trust by the retailer for remittance to the Secretary. A retailer that receives a tax payment from an admission facilitator must remit the amount received to the Secretary. A retailer is not liable for tax due but not received from an admission facilitator. The requirements imposed by this subsection on a retailer and an admission facilitator are considered terms of the contract between the retailer and the admission facilitator. Dual Remittance. - The tax due on the gross receipts derived from an admission charge may be partially reported and remitted to the operator of the venue for remittance to the Department and partially reported and remitted by the admission facilitator directly to the Department. The portion of the tax not reported and remitted to the operator of the venue must be reported and remitted directly by the admission facilitator to the Department. An admission facilitator that elects to remit tax under the dual remittance option is required to obtain a certificate of registration in accordance with G.S. 105-164.29. An admission facilitator is subject to the provisions of Article 9 of this Chapter. Exceptions. - The tax imposed by this section does not apply to the following: An amount paid solely for the right to participate, other than to be a spectator, in sporting activities. Examples of these types of charges include bowling fees, golf green fees, and gym memberships. Tuition, registration fees, or charges to attend instructional seminars, conferences, or workshops for educational purposes, notwithstanding that entertainment activity may be offered as an ancillary purpose of an event listed in this subdivision. A political contribution. A charge for lifetime seat rights, lease, or rental of a suite or box for an entertainment activity, provided the charge is separately stated on an invoice or similar billing document given to the purchaser at the time of sale. An amount paid solely for transportation. An amount paid for the right to participate, other than to be a spectator, in the following activities: Rock climbing, skating, skiing, snowboarding, sledding, zip lining, or other similar activities. Instruction classes related to the activities included in sub-subdivision a. of this subdivision. Riding on a carriage, boat, train, plane, horse, chairlift, or other similar rides. Amusement rides, including a waterslide. Exemptions. - The sale at retail and the use, storage, or consumption in this State of the following gross receipts derived from an admission charge to an entertainment activity are specifically exempt from the tax imposed by this Article: The portion of a membership charge that is deductible as a charitable contribution under section 170 of the Code or that is described in section 170(l)(2) of the Code. A donation that is deductible as a charitable contribution under section 170 of the Code or that is described in section 170(l)(2) of the Code. Charges for an amenity. If charges for amenities are separately stated on a billing document given to the purchaser at the time of the sale, then the tax does not apply to the separately stated charges for amenities. If charges for amenities are not separately stated on the billing document given to the purchaser at the time of the sale, then the transaction is a bundled transaction and taxed in accordance with G.S. 105-164.4D except that G.S. 105-164.4D(a)(3) does not apply. An event that is sponsored by an elementary or secondary school. For purposes of this exemption, the term "school" is an entity regulated under Chapter 115C of the General Statutes. An event sponsored solely by a nonprofit entity that is exempt from tax under Article 4 of this Chapter if all of the following conditions are met: The entire proceeds of the activity are used exclusively for the entity's nonprofit purposes. The entity does not declare dividends, receive profits, or pay salary or other compensation to any members or individuals. The entity does not compensate any person for participating in the event, performing in the event, placing in the event, or producing the event. For purposes of this subdivision, the term "compensate" means any remuneration included in a person's gross income as defined in section 61 of the Code. An event sponsored by a farmer that takes place on farmland and is related to farming activities, such as a corn maze or a tutorial on raising crops or animals. For purposes of this exemption, a farmer is a person who holds a qualifying farmer sales tax exemption certificate and farmland is land that is enrolled in the present-use value program under G.S. 105-277.3. Sourcing. - An admission charge to an entertainment activity is sourced to the location where admission to the entertainment activity may be gained by a person. When the location where admission may be gained is not known at the time of the receipt of the gross receipts for an admission charge, the sourcing principles in G.S. 105-164.4B(a) apply. History (2014-3, s. 5.1(c); 2015-6, s. 2.11; 2016-5, s. 3.4; 2017-204, s. 2.10(a); 2018-5, s. 38.5(e), (u); 2019-169, s. 3.3(c); 2019-246, s. 4(i).) Editor's Note. - Session Laws 2014-3, s. 5.1(g), made this section effective May 29, 2014, and applicable to gross receipts derived from an admission charge sold at retail on or after that date, except for subdivisions (f)(4) and (f)(5), which become effective January 1, 2015, and are applicable to gross receipts derived from an admission charge sold at retail on or after that date. The references to "section 170 of the Code" in subdivisions (f)(1) and (f)(2) refer to section 170 of the Internal Revenue Code, 26 U.S.C. § 170. The reference to "section 61 of the Code" in sub-subdivision (f)(5)c. refers to section 61 of the Internal Revenue Code, 26 U.S.C. § 61. Session Laws 2017-204, s. 2.10(b) made subdivision (f)(6), as added by Session Laws 2017-204, s. 2.10(a), effective retroactively to January 1, 2014. Session Laws 2017-204, s. 7.1, is a severability clause. Session Laws 2018-5, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2018.'" Session Laws 2018-5, s. 39.7, is a severability clause. Session Laws 2019-246, s. 4(q), made the amendment of this section by Session Laws 2019-246, s. 4(i), effective February 1, 2020, and applicable to sales occurring on or after that date. Session Laws 2019-246, s. 4(n), provides: "There is no obligation to collect the sales and use tax required by this section retroactively." Session Laws 2019-246, s. 4(o), is a severability clause. Effect of Amendments. - Session Laws 2015-6, s. 2.11, effective April 9, 2015, inserted "sale at retail and the use, storage, or consumption in this State of the" in the introductory paragraph of subsection (f); and substituted "An admission charge" for "Admission" in subsection (g). Session Laws 2016-5, s. 3.4, effective May 11, 2016, added subdivision (b)(3). Session Laws 2017-204, s. 2.10(a), effective retroactively to January 1, 2014, added subdivision (f)(6). Session Laws 2018-5, s. 38.5(e), (u), effective June 12, 2018, in subdivision (e)(1), substituted "solely for the right to participate, other than to be a spectator" for "for the right to participate"; added subdivision (e)(6); and in subdivisions (f)(1) and (2), added "or that is described in section 170 ( l )(2) of the Code" at the end. Session Laws 2019-169, s. 3.3(c), effective July 26, 2019, added "notwithstanding that entertainment activity may be offered as an ancillary purpose of an event listed in this subdivision" at the end of subdivision (e)(2); and substituted "activities" for "items" in sub-subdivision (e)(6)b. Session Laws 2019-246, s. 4(i), deleted subsection (a); added "admission" in subdivision (b)(1); in subsection (c), substituted "Admission Facilitator" for "Facilitator", and substituted "admission facilitator" for "facilitator" throughout, and made stylistic change. For effective date and applicability, see editor's note.