Response August 1, 1995
Request
April 14, 1995
Mr. Val Oveson
Utah State Tax Commission
210 North 1950 West
Salt Lake City, UT 84134
Dear Mr. Oveson:
We are requesting an advisory opinion concerning the charging of sales
tax for hunting access on our ranch, XXXXX.
Although owned by the XXXXX of the XXXXX, we are a for profit tax paying
entity. Part of our ranch operations
involves charging access to unguided big game hunters, and charging additional
hunters for guided hunts. We also work
with several outfitters which guide both hunters and fishermen on the ranch.
Please advise us concerning:
1. Are we required to pay sales
tax on gross revenue derived from sale of ranch access to hunters?
2. Are we required to pay sales
tax on revenue from guided hunts? If
so, on gross revenue?
3. Are outfitters similarly
required to pay sales tax? If so, I
assume we then would not pay tax for the same hunt (not pay tax twice on the
same trip/hunt)?
I thank you in advance for your assistance. Phone number is XXXXX or XXXXX.
Sincerely,
XXXXX
XXXXX
RE:
Advisory Opinion - Application of Sales Tax to Charges for Hunting Access
Dear
XXXXX,
You
requested an advisory opinion as to whether XXXXX is required to pay sales tax
on gross revenues from fees charged for guided and unguided hunts on your
land. XXXXX is required to collect
and remit sales tax on all charges to customers for guide service, camping,
lodging, meals, entrance onto private lands, access to private waters, or use
of facilities or equipment.
You
requested information about the outfitter’s responsibility for sales tax on
their guided tours on your ranch. The
answer to that question depends on your arrangement with the outfitter. If the outfitter collects fees for the
guided tours, the outfitter is required to collect and remit the sales
tax. If you collect the fees directly
from the outfitter’s customers, or if you charge the outfitter’s customers
separately for the use of taxable services, facilities or equipment, you must
collect and remit the sales tax on those transactions.
Your
letter did not mention whether guided tours include instruction, but we address
it here so you will be aware of a sales tax exemption which may relate to your
activities. Charges for instruction or
lessons are exempt from sales tax. An
activity is considered a “lesson” only if an instructor actively participates
in the development of skills, knowledge, and abilities to perform the related
activities. The mere presence of
availability of instructors is not sufficient to meet the criteria allowing
exemption. The exemption does not
extend beyond reasonable charges for the instruction provided, and tax exempt
charges must be listed separately on the receipt or invoice.
Finally,
you inquired as to whether separate charges to hunters for services to retrieve
animals is a taxable transaction. The
portion of the charge that is attributable to the rental of horses and
equipment is subject to sales tax, but the portion of the cost which is
attributable of services rendered by XXXXX employees is not. Again, the exempt charges must be separately
itemized on the receipt or the entire amount is taxed.
This
opinion is based upon the information presented in your letter and in telephone
discussion with our staff. If
additional facts arise which present you with new questions please fee free to
ask for another advisory opinion.
For
the Commission,
Alice
Shearer, Commissioner