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Posted by jsciba on April 19, 2007, 4:11 am
Please log in for more thread options > jsc...@yahoo.com wrote:
>> We are opening a business that offers birthday parties for
>> children. I know in Louisiana, we don't have to charge
>> sales tax on the birthday party itself. But we do give the
>> children party favors. I'm trying to find out if I have to
>> pay sales tax. And if so, is it on the whole price of the
>> party, or just on the value of the merchandise? I called
>> our parish (county) tax office and they had no idea!
> I take it these parties are not conducted on your own
> premises; if they were, I should think the party itself
> would be subject to sales tax under La. Rev. Stat. Ann.
> =A7 47:301(14)(b)(i), which imposes sales tax on
> "admissions" to "places of amusement." I don't see any
> annotations on this subject, but it appears that at least
> the "cover charge" at a place like Chuck E. Cheese, for
> example, would be subject to tax.
>
> However, if you are not subject to sales tax on the amount
> charged for the party itself, then you are probably the
> consumer of the party favors. You would pay sales or use
> tax when you purchase those items, and would not charge
> sales tax to your customer.
I found a person in the tax office that knew. It was as you
suggested: The parties are considered a non-taxable service
and since the party favors are included in the cost of the
party, no sales tax is charged. I do have to pay use tax on
the merchandise. Thanks for your reply,
Katie.
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