The local admissions and amusement tax is imposed by county and municipal governments at rates varying up to 10 percent of gross receipts from taxable activities. Effective January 1, 2008, a new state admissions and amusement tax of 20 percent is imposed on the total receipts from the operation of an electronic bingo machine permitted under a commercial bingo license or electronic tip jar, less the amount of money winnings or prizes paid out to players.
If the gross receipts are subject to both the Maryland sales and use tax and the admissions and amusement tax, as in the rental of sporting equipment, the rate of the admissions and amusement tax is limited to 5 percent.
Reporting charges
The local admissions and amusement tax is a gross receipts tax imposed solely upon the person receiving the taxable receipts. The new 20 percent state admissions and amusement tax on electronic bingo and electronic tip jars is imposed on the net proceeds. In either case, unlike the sales and use tax, there is no requirement to make a separate charge for the admissions and amusement tax.
Admissions and amusement taxes which may be due for both the state of Maryland and a county or municipality for these specific activities must be noted on separate lines on the admissions and amusement tax return and may not be combined. The tax owed the state is the same whether calculated on a separately stated or tax-included basis.
Tax rates
You can download a complete rate chart or request one by calling the Taxpayer Service Section at 410-767-1300 in the Baltimore area, or 1-800-492-1751 from elsewhere in Maryland. Once a registered taxpayer has filed an initial return, subsequent returns will be pre-printed with the correct rates for previously-reported activities.
Exemption certificates
The admissions and amusement tax is not reduced because your customers may have a sales and use tax exemption certificate, diplomatic exemption
card or other evidence of exemption.
Deductions for expenses
Generally, deductions for prizes, cost of goods sold and other expenses are not permitted since the admissions and amusement tax is a gross receipts tax and not an income tax permitting the deduction of expenses. The only exception is in Anne Arundel County (outside of any municipality) where the cost of prizes in bingo games may be deducted before computing the tax.
Free admissions
An additional tax is imposed on reduced charge or free admissions in most, but not all subdivisions. If the jurisdiction imposes this tax, the tax is 5 cents for each ticket if the regular price is less than 50 cents, 10 cents for each ticket if the regular price is less than $1.00, and 15 cents for each ticket if the regular price is $1.00 or more.
The tax on reduced charge or free admissions is payable in full even if the actual
amount of taxes payable would exceed 10 percent of gross receipts.
Baltimore County example
A Baltimore County business with $9,900 in receipts subject to a local 10 percent admissions and amusement tax rate should calculate the tax as follows:
- Convert the tax rate to a decimal and add 1:
.10 + 1 = 1.10
- Divide the total receipts by the answer obtained in the previous step to find taxable gross receipts:
$9,900 ÷ 1.10 = $9,000
- Multiply the answer in the previous step by the tax rate to find the tax:
$9,000 x 10% = $900
- Report taxable gross receipts of $9,000 and a tax of $900.
