Tag Archives: amusement

UT renews call for keeping revenue on tickets to UT events

The University of Tennessee is renewing a call for change in state law to let the athletic department keep revenue from a
5 percent “amusement tax” levied on tickets sold to UT-Knoxville events, including football and basketball games. The current law, passed by the Legislature in the 1940s, sends the money to the City of Knoxville.

Knoxville officials, of course, haven’t liked the idea in the past and don’t like it now.

From the News Sentinel:

On Thursday, the athletics department sent a release titled “The Facts on the ‘Amusement Tax’ ” that called the tax “an annual $1.6 million financial burden to Tennessee athletics.”

The amusement tax is a fee that the city receives from ticket sales to local amusements, including movie theaters and some UT athletics events. The fee, similar to sales tax that a business collects when consumers purchase goods, is applied to ticket costs.

Knox County officials recently gave up collecting roughly $200,000 it receives annually from the tax, which constituted 0.5 percent on tickets sold at UT games and movies. It is unclear whether Knox County’s refusal to collect the amusement tax will result in reduced ticket prices for UT events.

Knoxville, which taxes 4.5 percent on those tickets, uses that money to help fund departments and municipal services that UT and the general public use on game days and year-round, according to officials.

Furthermore, fans pay the tax, Knoxville officials said, not UT.

“It is not the case that UT itself is paying some tax to the city out of its own funds,” the city’s communication director, Jesse Mayshark, wrote in an email. “Likewise, repealing the tax in and of itself would not produce any new money for UT. The only way the athletics department would benefit revenue-wise from repeal of the tax is if they then raised ticket prices an equivalent amount so that they would be getting that revenue instead.”

The money UT would collect from keeping the amusement tax revenue could enhance the “fan experience” at games, according to officials there.
to Knoxville officials, however, said the city does not expect to give up money collected in amusement taxes each year.

On Thursday, the athletics department sent a release titled “The Facts on the ‘Amusement Tax’ ” that called the tax “an annual $1.6 million financial burden to Tennessee athletics.”

The amusement tax is a fee that the city receives from ticket sales to local amusements, including movie theaters and some UT athletics events. The fee, similar to sales tax that a business collects when consumers purchase goods, is applied to ticket costs.

Knox County officials recently gave up collecting roughly $200,000 it receives annually from the tax, which constituted 0.5 percent on tickets sold at UT games and movies. It is unclear whether Knox County’s refusal to collect the amusement tax will result in reduced ticket prices for UT events.

Knoxville, which taxes 4.5 percent on those tickets, uses that money to help fund departments and municipal services that UT and the general public use on game days and year-round, according to officials.

Furthermore, fans pay the tax, Knoxville officials said, not UT.

“It is not the case that UT itself is paying some tax to the city out of its own funds,” the city’s communication director, Jesse Mayshark, wrote in an email. “Likewise, repealing the tax in and of itself would not produce any new money for UT. The only way the athletics department would benefit revenue-wise from repeal of the tax is if they then raised ticket prices an equivalent amount so that they would be getting that revenue instead.”

The money UT would collect from keeping the amusement tax revenue could enhance the “fan experience” at games, according to officials there.

Note: Previous post HERE

UT Ticket Tax Unfair, Officials Say

People purchasing tickets to University of Tennessee athletic events pay a 5 percent “amusement tax” in addition to other levies, with the revenue earmarked for the City of Knoxville and Knox County. UT officials would like to keep the money – about $1.5 million per year – for UT purposes, reports the News Sentinel.
For decades the University of Tennessee has sought to eliminate the tax.
The university, however, does not want to lower ticket prices, said Senior Associate Athletic Director Bill Myers. Rather, UT Athletics want to keep roughly $1.5 million it’s currently collecting on behalf of the city and county and use it toward planned construction projects and making up the $4 million budget shortfall the athletics department faced last year.
The tax dates back to state legislation passed in the 1940s and applies only to Knox County. The law has since been whittled down with exemptions over the years and now largely targets movie theatres outside the central business district and regular-season college athletic events in Thompson-Boling Arena and Neyland Stadium.
“We’re the only entity in the state that pays this tax — I’m talking about university athletic programs,” said Chancellor Jimmy Cheek. “Vanderbilt doesn’t pay it, University of Memphis doesn’t pay it, ETSU doesn’t pay it. It’s a state law that affects only Knox County.”
It’s an unfair tax, he said.
…Though the money is a small portion of the city’s roughly $180 million general fund budget, it’s revenue the city does not want to do without, said Knoxville Law Director Charles Swanson. If it disappears, he said, the city may have to raise other taxes to make up the difference.
City officials appreciate the value of having the university nearby and the economic stimulus that fans bring when they come to town, but it presents challenges that cost money to deal with, he said.