Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 280.0828

280.0828 Pro Tournament Meal and Gift Certificates. A golf club holds golf tournaments in which the majority of the required entry fees are used for prizes in the form of discounts or gift certificates for use at the golf pro shop operated by the golf club. In some tournaments, the entry fee also entitles the entrant to a free dinner at the club restaurant.

The meals provided are subject to tax based on the regular menu price. The inclusion of the meal in the entry fee would not exclude the retail selling price of the meal from tax. The portion of the entry fee not assigned to the meal is a payment for the intangible right to compete in the golf tournament and is not subject to tax.

Tax also applies to the retail selling price of the goods sold to prize winners by the pro shop. The discounts or gift certificates are considered the same as cash prizes. When goods are purchased at the pro shop, the retail selling price is subject to tax because the discount or gift certificate is considered to be merely a form of payment, and it would not be considered that the retail selling price has been reduced. 5/26/76.