Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 205 - Sourcing of Taxable Services, Tangible Personal Property, and Specified Digital Products › Rule 701-205.5 - Sourcing of Tickets or Admissions to Places of Amusement, Fairs, and Athletic Events

Current through Register Vol. 47, No. 3, July 24, 2024
Sales of tickets or admissions to places of amusement, fairs,
				  and athletic events are sourced in the same manner as services, using the
				  destination sourcing requirements described in Iowa Code section
				  423.15 and as set forth in rule
				  701-205.2 (423). Generally, the
				  sale of a service is sourced to the location where the purchaser makes first
				  use of the service. In the case of an event that the purchaser attends at a
				  physical location, first use would occur at the location of the event.
EXAMPLE: X makes retail sales of tickets to music concerts in
				  Iowa. X is a retailer maintaining a place of business in this state under Iowa
				  Code section 423.1(48)  and
				  therefore is required to collect Iowa sales tax and local option sales tax on
				  retail sales of these tickets. More information can be found in Iowa Code
				  section 423.2(3). Y is
				  a resident of Marshalltown, Iowa. Y purchases two tickets to attend a concert
				  in Ames, Iowa. The sale is sourced to Ames, the location of the event. The
				  result is the same regardless of how or where Y's tickets are delivered. X must
				  charge Iowa sales tax and any local option sales tax that applies to sales
				  sourced to Ames, Iowa.
(1)
Sales of admissions to virtual events.
First use of a ticket
				of admission to a virtual event occurs at the location where the attendee first
				participates in or accesses the event, if known to the seller. If this location
				is unknown, the sale is sourced pursuant to Iowa Code section
				423.15(1).
EXAMPLE: X is hosting a virtual video game tournament. X is a
				  retailer maintaining a place of business in this state under Iowa Code section
				  423.1(48). Y
				  purchases admission to participate in the virtual video game tournament from a
				  residence in Council Bluffs, Iowa. Y's access to the tournament begins
				  immediately upon purchase, and Y's location is known to X. Therefore, X must
				  source the admission to Council Bluffs, Iowa. X must charge Iowa sales tax and
				  any local option sales tax that applies to sales sourced to Council Bluffs,
				  Iowa.
(2)
Sales of
				admissions that can be used at multiple locations.
Admissions that may
				be used at multiple locations should be sourced to the location where the
				admission is purchased if the purchaser picks it up in person and it can be
				used at that location. If the service cannot be used at that location or the
				sale is made online, the sale should be sourced using the provisions of Iowa
				Code section 423.15 and these rules that
				apply when the location of first use is unknown.
EXAMPLE 1: X is a movie theater located in West Des Moines,
				  Iowa. X sells movie passes that can be used at its location and other locations
				  across Iowa. Y purchases a movie pass at X's location in West Des Moines. Y's
				  purchase is sourced to West Des Moines. X must collect Iowa sales tax and any
				  local option sales tax that applies to sales sourced to West Des Moines,
				  Iowa.
EXAMPLE 2: X is a health club with locations across Iowa. X
				  has a website where memberships can be purchased. Memberships can be used at
				  any of X's locations. Y purchases a membership through X's website. Y is
				  required to provide an address when the membership purchase information is
				  filled out. Y provides an address in Clive, Iowa. Therefore, the sale is
				  sourced to Clive. More information can be found in Iowa Code section
				  423.15(1)
"c."
X must therefore collect Iowa sales tax and any local
				  option sales tax imposed in the city of Clive.