When West Virginia legalized professional mixed martial arts (MMA) matches in 2011, it was the 45th state to do so; those lobbying for legalization had to fight “strong opposition” among legislators who worried the sport was too violent. But since then, the sport has seen steady growth in The Mountain State. Amateur MMA matches were legalized in 2015.
In addition to pleasing West Virginia mixed martial artists and fans, legalization is bringing money into the state. People come from all over to compete and view competitions, purchasing food, lodging, and more during their stay. That boosts local businesses, as well as state and local tax revenue.
Ticket sales subject to sales tax
Admissions to MMA (and boxing) competitions can be pricey — tickets to an upcoming MMA match cost up to $600 — and they’re subject to West Virginia state sales tax and applicable local sales tax.
As explained by the West Virginia State Tax Department, “For sales and service tax purposes, boxing matches and mixed martial arts contests are considered amusement or entertainment services. Unless otherwise exempted, all sales of tangible personal property, amusement services and other services rendered in the operation of a place of amusement or entertainment are subject to the Consumers Sales and Service Tax.”
Tickets aren’t the only taxable item: Sales of concessions, novelties, programs, and souvenirs are also subject to tax in West Virginia.
Tax must be collected and remitted to the state by either the promoter of the event or the operator of the place of amusement or entertainment. The state recommends tax liability be spelled out in contracts, so there’s no doubt as to who’s the responsible party.
Comped tickets subject to use tax
Tickets and other items that are given away for promotional purposes are subject to use tax at the same rate as the corresponding sales tax. For tickets, the taxable value is the amount the ticket would have sold for. For other items, such as concessions and T-shirts, tax applies to “the cost of the goods to the promoter or operator.”
Promoters and operators should know that the State Tax Department doesn’t administer local taxes: Any applicable local Business and Occupation Tax on gross income from events, or Amusement Tax on admissions fees should be remitted to local tax authorities. For additional information, please see TSD-433.
Learn more about West Virginia sales and use tax here.