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Non-profit 501(c)(3) groups must collect sales tax on their charges for all categories of taxable admissions for periods beginning July 1, 2018, forward.

The Kentucky Supreme Court recently held that the Ky. Const. Section 170 exemption for charitable institutions applied only to property taxes and not to excise taxes (sales and use tax). The only sales tax exemptions for 501(c)(3) charitable, educational, and religious organizations are those explicitly listed in KRS Chapter 139. Except for the very narrow exemptions for horse racetracks, historical sites, county fairs, elementary and secondary schools, and non-profit 501(c)(3) school-sponsored clubs and organizations, all other entities engaged in sales of admissions must begin collecting tax on these sales.

Non-profit 501(c)(3) groups must collect sales tax on their charges for all categories of taxable admissions for periods beginning July 1, 2018, forward.

The Kentucky Supreme Court recently held that the Ky. Const. Section 170 exemption for charitable institutions applied only to property taxes and not to excise taxes (sales and use tax). The only sales tax exemptions for 501(c)(3) charitable, educational, and religious organizations are those explicitly listed in KRS Chapter 139. Except for the very narrow exemptions for horse racetracks, historical sites, county fairs, elementary and secondary schools, and non-profit 501(c)(3) school-sponsored clubs and organizations, all other entities engaged in sales of admissions must begin collecting tax on these sales.

​No, as long as the net proceeds from the sales are used solely for the benefit of the elementary or secondary school or its students. See KRS 139.497 for more information.

​Below are examples of taxable and nontaxable admissions charges DOR has recently reviewed:

Taxable

  1. Sports league fees to participate in games
  2. Shelter rentals for picnics
  3. Gyms, ball fields, tennis courts, disc golf courses, miniature golf
  4. Rental of pool facilities and party rentals
  5. Locker rentals at health clubs, gyms, golf courses
  6. Boat ramp fees
  7. Entry fees for fishing tournaments
  8. Entry fees for bridge tournaments or other competitive, amusement activities
  9. Gun clubs, shooting ranges
  10. Bingo
  11. Go-karts, batting cages, zip-lines

Nontaxable

  1. Team membership fees - payment to join a team will not be considered a taxable admission. This treatment is consistent with memberships to fraternal orders, professional organizations, etc. The new admissions language refers to membership fees in the context of participating in an event or activity not to join an organization.
  2. Professional or fraternal order memberships
  3. Instructor-led recreational classes or one on one instruction for swimming lessons, fitness classes, personal trainer exercise instruction, riding lessons, golf lessons, etc.
  4. Classes to obtain a professional designation, continuing education credits, or certified training programs such as lifeguard certification classes are exempt. School tuition, registration fees, or charges paid to attend instructional seminars, conferences, or educational workshops are not taxable sales of admissions if the primary intent of the program is for education rather than entertainment.
  5. Day care or child care facilities and fees
  6. Summer resident camps and day camps with educational/instructional components
  7. Personal training received for music lessons, dance lessons, art classes - painting, pottery, etc.
  8. Driver's license, hunting license, or fishing license fees
  9. General facility rentals - conference rooms, ballrooms, temporary storage facilities



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