Licenses to Use Luxury Suites and Skyboxes Taxable in Texas

Monday, August 12th, 2013


The Texas Comptroller's Office has released a policy letter discussing the application of sales tax to "rentals" of stadium luxury suites and skyboxes. These are generally licenses and are thus taxable as admissions to amusement. Some rentals, however, are non-taxable leases of real property.

To determine whether the transaction is a taxable license or a non-taxable lease, auditors will look at what rights the contract gives the customer. A license grants the customer a non-exclusive right to use the suite. It does not give the customer exclusive dominion or control over the suite. A license may allow the customer to control decor, cleaning, or opening and closing the suite. These licenses are subject to sales tax.

A lease, however, must give the customer the exclusive right to use, occupy, and control the suite for a set time. The customer must have access to the suite "24 hours per day, seven days a week, other than when the stadium is hosting ticketed events." These leases are not subject to sales tax.

For both licenses and leases, the stadium owner will owe tax on items provided to the customer as part of the rental contract. The owner may not purchase these items exempt with a resale certificate.

About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at or call 866.578.8193.

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