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House OKs plan to tax 2002 Games tickets

Thinking of attending an ice hockey game or maybe figure skating during the 2002 Winter Olympics? The already hefty price tag may become even higher.

On Friday, the House unanimously passed HB371 that clarifies that tickets to Olympic sporting events are subject to the same sales tax now collected on tickets to other sporting events, such as Utah Jazz tickets and University of Utah football tickets."These events would become taxable to the same extent as other events. No more and no less," said bill sponsor Rep. John Valentine, R-Orem.

Currently, tickets to Olympic events are exempt from the state sales tax because the hosting entity, the Salt Lake Organizing Committee, is a nonprofit, charitable organization that is exempt from all taxes.

Olympic organizers have lobbied to keep that exemption for ticket sales, arguing that the price of Winter Games tickets is such that even the slight increase in prices caused by a sales tax would lead to a decrease in ticket sales. And ticket sales are a huge part of the estimated $1 billion needed to put on the Games.

But there is growing concern among lawmakers that the Winter Games will require considerable investment of state resources, perhaps even tax revenue. And they are suspicious of SLOC's motives when those officials oppose efforts to collect a sales tax that is already being paid by spectators for all other sporting events.

There are also concerns that SLOC could use its tax-exempt status to avoid paying car rental taxes and transient room taxes on hotels. (SLOC reserves huge numbers of hotel and motel rooms for third parties such as broadcasters and athletes). Lawmakers were told SLOC already uses that exempt status to avoid paying taxes on sales at its small Olympic memorabilia store housed at SLOC offices.

"They used the loopholes in the law to do things we didn't want them doing, so we are closing the loopholes," Valentine said. "But what they did was totally within the law."

Jim Jardine, legal counsel to the SLOC Board of Trustees, said Olympic organizers have agreed to collect sales taxes on its memorabilia sales, although such sales are insignificant. It has also agreed that transient room taxes and car rental taxes would be paid for all services not directly used by SLOC. SLOC even agreed to do that without legislation.

"It was not our intent to have our tax exempt status used by anyone other than SLOC employees and volunteers," Jardine said. "We are in agreement with every other part of his (Valentine's) bill except the sales tax on ticket sales."

Valentine's bill specifically exempts SLOC employees and volunteers from paying the various taxes when they are engaged in official SLOC business.

Instead, the bill mandates that SLOC pay the taxes whenever it markets hotel rooms, rental cars and merchandise to third parties such as the media, athletes and various Olympic committees. And it specifies that ticket sales are taxable.

"We are saying to SLOC that it should not be able to buy up all the available rooms and use its tax-exempt status to avoid paying the taxes and then resell those rooms to NBC," Valentine said.

The bill will have priority status when it goes to the Senate for final passage next week. If it passes, and it is expected to pass, it will raise $11 million to $13 million in sales tax revenue in the year 2002 - revenue Valentine said could be used to offset the costs to state government of hosting the Winter Games.