Smithfield Herald

Ticket sales subject to tax

Brittney Tant sells concessions at the Howell Theatre in Smithfield. Concessions and movie tickets are now subject to state and local sales taxes.
Brittney Tant sells concessions at the Howell Theatre in Smithfield. Concessions and movie tickets are now subject to state and local sales taxes.

Businesses and nonprofits in Johnston County have mixed feelings about the state’s new sales tax on entertainment.

Last year, as part of its tax overhaul, the N.C. General Assembly subjected movies and live entertainment to state and local sales taxes. In Johnston County, the combined tax is 6.75 percent on every ticket and concession sold.

At Johnston Community College, home to the Country Music Showcase and a performing-arts series, the tax will hurt performers and attendees, said Zilphia Adcock, manager of performing arts.

“Our competition is some of the larger venues that are more popular outside the area, and this is only going to hurt us,” she said. “We host a lot of dance recitals and arts events for our local high schools for their fundraisers, and this is just going to be an additional impact on our already-stretched patrons.”

Rather than raise prices across the board to cover the tax, JCC is applying the sales tax to every ticket and concession sold, Adcock said.

She she doesn’t think the tax will decrease ticket sales; it just means patrons will be able to do less with their money.

Elsewhere in Smithfield, the Neuse Little Theatre chose to raise ticket prices by a dollar rather than calculate the sales tax on every ticket sold. NLT tickets are now $13 in advance and $15 at the door, up from $12 and $14, respectively.

The sales tax also applies to concession sales, which the nonprofit NLT uses to fund a scholarship and capital expenses, said business manager Joyce Kilpatrick-Jordan. The theater group has chosen not to raise concession prices, she said.

The tax does not apply to tickets sold last year for shows this year.

“We did figure out that all of our season tickets, which went on sale last year, would not be affected,” Kilpatrick-Jordan said. “So that was the good news. The bad news is we seem to be raising prices at the door in 2014 for no reason, as far as customers can tell.”

“It’s a fact of life, so we had to figure out how to deal with it,” she said.

Like the Neuse Little Theatre, the Clayton Center won’t have to apply the tax to tickets sold in 2013 for shows in 2014. But tickets sold this year will include the tax, and outside groups using the Clayton venue will have to collect the tax, said Scott Henley, the Clayton Center’s interim executive director.

Henley isn’t worried about the tax affecting ticket sales. “I think we’re all just going to watch our own personal budgets and make our decisions based on whether or not we feel it fits into our budget,” he said. “The tax is just one variable that will help us decide yes or no.”

At the Howell Theatre in Smithfield, the sales tax is just one more cost the four-screen theater could do without, said owner Chuck Kirkman, The Howell has raised the price of a movie ticket from $2.50 to $3, but it hasn’t raised the price of concessions, choosing instead to absorb the loss, Kirkman said.

“It hasn’t really had any impact on my business, just an impact on my bottom line,” he said.

The tax comes at an inopportune time for the Howell, which recently added new digital projectors that cost thousands of dollars, Kirkman said.

He added: “It is a little unfair only in this regard – as a theater owner and provider of movies to the customers of the community, I pay so much money to the studios, but they don’t give me a break because I have to pay more tax.”