Milwaukee Symphony Ticket Revenues Subject to Taxes

The Court of Appeals of Wisconsin agreed with the Wisconsin Department of Revenue that concerts by the Milwaukee Symphony Orchestra (MSO) were “entertainment events” subject to a 5% state sales tax under Wis. Stat. '77.52(2)(a)(2). Milwaukee Symphony Orchestra Inc. v. Wisconsin Department of Revenue, 2008AP1684. The MSO sought a tax refund of $719,456.69 for tickets it sold directly and through Ticketmaster. The MSO argued that its ticket revenues were exempt from the state tax as either educational or charitable events.

But the court of appeals explained: “The commission considered extensive evidence, including: MSO's prior and current mission statements, its federal and state income tax status, its financial operations and business plan, the number and types of concerts performed each year, the audiences who attended the various types of concerts, advertising and marketing, formal surveys of concertgoers elsewhere and informal surveys and comments of MSO concert attendees. The commission's conclusion that the concert performances were primarily entertainment is a reasonable one based on the record. The commission recognized that learning and an aesthetic experience was a component of attending the concerts for many, that the music was artistically excellent, and that MSO's current mission statement and certain activities were directed at educating the public on the music so as to develop greater appreciation of it. However, there was also much evidence that MSO and the attendees viewed the concerts as a form of entertainment and the commission was reasonably persuaded that this was the primary characteristic of the event-from the audiences' standpoint, from the marketing and advertising of MSO, and from the nature of the concerts themselves.

The court of appeals further noted: “The commission concluded the concerts were not charitable events ' because they were not something that would ordinarily be provided by government, and that, even if the purpose of an event were charitable, this in itself did not preclude the event from coming within one of the categories of events taxable under Wis. Stat. '77.52(2)(a)(2). ' The commission reasonably decided that MSO's concerts are not charitable under the definition MSO provided, notwithstanding the importance of the performing arts to communities. The commission also reasonably decided that neither the charitable purpose of a concert nor the fact that an organization is considered 'charitable' for other tax purposes precludes a concert from being considered primarily an entertainment event and therefore taxable under Wis. Stat. '77.52(2)(a)(2).”

The Court of Appeals of Wisconsin agreed with the Wisconsin Department of Revenue that concerts by the Milwaukee Symphony Orchestra (MSO) were “entertainment events” subject to a 5% state sales tax under Wis. Stat. '77.52(2)(a)(2). Milwaukee Symphony Orchestra Inc. v. Wisconsin Department of Revenue, 2008AP1684. The MSO sought a tax refund of $719,456.69 for tickets it sold directly and through Ticketmaster. The MSO argued that its ticket revenues were exempt from the state tax as either educational or charitable events.

But the court of appeals explained: “The commission considered extensive evidence, including: MSO's prior and current mission statements, its federal and state income tax status, its financial operations and business plan, the number and types of concerts performed each year, the audiences who attended the various types of concerts, advertising and marketing, formal surveys of concertgoers elsewhere and informal surveys and comments of MSO concert attendees. The commission's conclusion that the concert performances were primarily entertainment is a reasonable one based on the record. The commission recognized that learning and an aesthetic experience was a component of attending the concerts for many, that the music was artistically excellent, and that MSO's current mission statement and certain activities were directed at educating the public on the music so as to develop greater appreciation of it. However, there was also much evidence that MSO and the attendees viewed the concerts as a form of entertainment and the commission was reasonably persuaded that this was the primary characteristic of the event-from the audiences' standpoint, from the marketing and advertising of MSO, and from the nature of the concerts themselves.

The court of appeals further noted: “The commission concluded the concerts were not charitable events ' because they were not something that would ordinarily be provided by government, and that, even if the purpose of an event were charitable, this in itself did not preclude the event from coming within one of the categories of events taxable under Wis. Stat. '77.52(2)(a)(2). ' The commission reasonably decided that MSO's concerts are not charitable under the definition MSO provided, notwithstanding the importance of the performing arts to communities. The commission also reasonably decided that neither the charitable purpose of a concert nor the fact that an organization is considered 'charitable' for other tax purposes precludes a concert from being considered primarily an entertainment event and therefore taxable under Wis. Stat. '77.52(2)(a)(2).”