Amends TCA Title 67, Chapter 6, Part 3.

ON APRIL 10, 2023, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 1154, AS AMENDED.<br /> <br /> AMENDMENT #1 rewrites this bill to establish a limitation to the amusement tax exemption under the Retailers' Sales Tax Act. <br /> <br /> ALLOCATIONS<br /> <br /> Under present law, if there exists in a municipality a sports authority and if that sports authority has secured a major league professional baseball (American or National League), basketball (National Basketball Association), soccer (Major League Soccer), or major or minor league professional hockey (National Hockey League, or Central Hockey League or East Coast Hockey League), or a major league professional football franchise (National Football League or Canadian Football League, or its successors or assigns) franchise for that municipality, and only if the municipality or any board or instrumentality of the municipality reimburses the state for any costs to reallocate apportionments of the tax revenue, then an amount must be apportioned and distributed to the municipality equal to the amount of state tax revenue derived from the sale of admissions to events of the major or minor league professional sports franchise and also the sale of food and drink sold on the premises of the sports facility in conjunction with those games, parking charges, and related services, as well as the sale by the major or minor league professional sports franchise within the county in which the games take place of authorized franchise goods and products associated with the franchise's operations as a professional sports franchise. The amount distributed to the municipality must be for the exclusive use of the sports authority, or comparable municipal agency formally designated by the municipality. <br /> <br /> If an indoor sports facility owned by a sports authority, in which a professional sports franchise is a tenant, exists in a county with a metropolitan form of government, then an amount must be apportioned and distributed to the municipality equal to the amount of state tax revenue derived from the sale of admissions to all other events occurring at the indoor sports facility and from all other sales of food and drink and other authorized goods or products sold on the premises of the sports facility, parking charges, and related services.<br /> <br /> EXEMPTION<br /> <br /> Under present law, there is a levied tax at a rate equal to the rate of tax levied on the sale of tangible personal property at retail on the sales price of each sale at retail of the following: <br /> <br /> (1) Dues or fees to membership sports and recreation clubs, including free or complimentary dues or fees, when such are made in connection with a valuable contribution to any such establishment or organization, which must have the value equivalent to the charge that would otherwise have been made, including any fees paid for the use of facilities or services rendered at a health spa or club or any similar facility or business;<br /> <br /> (2) Sales of tickets, fees or other charges made for admission to or voluntary contributions made to places of amusement, sports, entertainment, exhibition, display or other recreational events or activities, including free or complimentary admissions when made in connection with a valuable contribution to any organization or establishment holding or sponsoring such activities which must have the value equivalent to the charge that would have otherwise been made;<br /> <br /> (3) Charges made for the privilege of entering or engaging in any kind of recreational activity, when no admission is charged spectators, such as tennis, racquetball or handball courts; and<br /> <br /> (4) Charges made for the privilege of using tangible personal property for amusement, sports, entertainment or recreational activities such as trampolines, golf carts, bowling shoes, skates or other sports and athletic equipment.<br /> <br /> However, present law provides that the sales price of admissions to amusement or recreational activities conducted, produced, or provided by the following entities are exempt from the sales tax on admission, dues, or fees:<br /> <br /> (1) Not-for-profit museums, not-for-profit entities that operate historical sites and not-for-profit historical societies, organizations or associations;<br /> <br /> (2) Organizations that have received and currently hold a determination of exemption from the internal revenue service, pursuant to federal law;<br /> <br /> (3) Organizations listed in Major Group No. 86 of the Standard Industrial Classification Manual of 1972, as amended, prepared by the office of management and budget of the federal government; or<br /> <br /> (4) Tennessee historic property preservation or rehabilitation entities;<br /> <br /> However, the exemption does not apply unless such entities, societies, associations or organizations promote, produce, and control the entire production or function.<br /> <br /> This amendment provides that, on or after January 1, 2027, this exemption does not apply to amusement or recreational activities conducted, produced, or provided at a facility owned by a sports authority organized under the Metropolitan Celebration Authority Act, during a period in which the facility is eligible to receive a distribution of state sales tax revenue pursuant to allocations required for a sports authority in a municipality that has secured a major league professional baseball, basketball, soccer, football, or major or minor league professional hockey franchise. <br />