Form revised March 16, 2004

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Executive Administration	Mel McDonald/3-0071	Eve Sternberg/6-1119

Legislation Title:

AN ORDINANCE relating to the admission tax; providing for an exemption from the admission tax for the Fremont Fair and organized youth athletic competitions; eliminating the admission tax on secondary market sales of admission tickets; providing for college, universities and nonprofit organizations to request non-taxable donations or contributions in lieu of an admission charge for certain events; revising, for technical purposes only, the language of the exemption of those portions of membership dues and initiation fees paid solely to join or to continue membership in an organization or club; repealing Sections 5.40.027 and 5.40.040 and amending Sections 5.40.010, 5.40.020, 5.40.025 and 5.40.060 of the Seattle Municipal Code.

· Summary of the Legislation:

The proposed legislation would amend Chapter 5.40 of the Seattle Municipal Code, which regulates the administration and imposition of admission taxes on certain events within Seattle. The proposed revisions add the Fremont Street Fair to the current list of annual events that are specifically exempted from admission tax regulation. An admission tax exemption is added for certain organized athletic events for youths under the age of 19. The proposed legislation also amends SMC 5.40.020 to clarify the requirements by which colleges, universities, and non-profit organizations may request non-taxable donations or contributions in lieu of an admission charge for certain events, and clarifies the exemption for membership dues and initiation fees. Finally, proposed revisions to SMC 5.40.060 would eliminate the application of the admission tax when individuals re-sell admission tickets for more than face value.

· Background:

The City of Seattle collects admission tax on ticket sales for certain activities and events. The proposed legislation clarifies exemptions from admission tax that are consistent with, but not explicitly provided for, in current Code provisions. Although not explicitly named, certain organizations and activities, such as the Fremont Street Fair, are not currently subject to paying admission tax. There are, therefore, no revenue implications resulting from the explicit exemptions provided for by this ordinance at this time.

The proposed legislation also specifies the conditions under which exempt organizations may request donations in lieu of an admission charge, and the conditions under which membership and initiation dues are subject to admission tax. These revisions do not constitute a substantive change to current policy.

Finally, the legislation effectively allows the secondary sale of tickets at prices above face value. The attached Bill revises SMC 5.40.060 to eliminate the application of the admission tax on the incremental markup when individuals re-sell admission tickets for more than their face value. The City does not currently collect admission tax on secondary ticket sales so there is no revenue loss resulting from these revisions. Future potential revenue associated with secondary ticket sale regulations is negligible, particularly when the cost of enforcement and prosecution is taken into consideration.

__X_ This legislation does not have financial implications.