The admissions and amusement tax is imposed by county and municipal governments at varying rates up to 10 percent of gross receipts from taxable activities. If the gross receipts from the activity is also subject to the sales and use tax, the admissions and amusement tax is limited to 5 percent. Effective January 3, 2008, electronic bingo and electronic tip jars are subject to a new state admissions and amusement tax of 20 percent, which is imposed on the net proceeds.

Often, different rates apply to different activities. Check our rate chart to determine the tax for your planned activity. Once you file an initial return, we will pre-print the correct rates for previously reported activities on subsequent returns.

Unlike the sales and use tax, which is imposed on the person making the purchase, the admissions and amusement tax is imposed on the person or business receiving the taxable receipts. For this reason, you are not required to impose a separate charge on the consumer for this tax as you would to collect the sales tax. The tax owed to the state is the same whether calculated as a separate charge or on a tax-included basis.

Exemption certificates

Also unlike the sales and use tax, exemption certificates are not valid for the admissions and amusement tax. Since the tax is imposed on the host of the activity rather than on the consumer, the exemption does not apply.

Deductions

Deductions are not permitted for prizes, cost of goods sold or other 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.

Exempt activities

If all of the proceeds from an activity are donated to a charity, the gross receipts are exempt from the admissions and amusement tax. Also, the gross receipts from sales of tickets to political fundraisers are not subject to tax.

Free admission tickets

Most subdivisions impose the tax on free admission tickets or tickets sold at a reduced charge. If your jurisdiction imposes this tax, it is equal to:

• 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.

Computing the Tax on a Tax-included Basis

To compute the admissions and amusement tax using receipts that already include the tax, follow this four-step process: Step 1 - Convert the tax rate to a decimal and add 1. Step 2 - Divide the total receipts by the number obtained above to find taxable gross receipts. Step 3 - Multiply the above answer by the tax rate to find the tax. Step 4 - Report the total mount of taxable gross receipts and the total amount of tax separately.

If a business in Baltimore County, where the rate is 10 percent, has receipts from tax-included admissions totaling $9,900 for the reporting period, the tax is computed as follows:

Step 1 - Convert the tax rate to a decimal and add 1: .10 + 1 = 1.10 Step 2 - Divide the total receipts by the number obtained in Step 1 to find taxable gross receipts: $9,900 ÷ 1.10 = $9,000 Step 3 - Multiply the answer to Step 2 by the tax rate to find the tax: $9,000 x 10% = $900 Step 4 - Report taxable gross receipts of $9,000 and tax of $900.