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View Full Version : Reds vs Ohio Dept of Taxation - The Bobblehead Case



coasterville95
02-22-2018, 11:35 AM
Caught this news article.

It seems out state government is busy with various important matters - like stadium give aways.

In short, the state claims that a give away item such as a bobble head is a thing of value and somebody needs to pay the sales tax on it.

The reds claim they purchased them to resell to fans and the price of the bobblehead is bundled into the price of the ticket.

The state claims it is not, because the price of the giveaway item isn’t specifically stated, tickets on giveaway days are the same price as tickets on non giveaway days, and the customer can’t get a discount by refusing the giveaway item. (Or no more are available such as in a first 19,000 fans” promotion).

Anyway the state sent the Reds a tax bill for the sales tax liability of the bobble heads. The reds refuse to pay it. It’s now in the Ohio supreme court.

Some say this has far reaching implications, not just to the reds or sports teams but all the way down to the toy in your child’s happy meal.

The reds say, if you charge us for this, start taxing the happy meal toys. Same thing.

ArizonaXUGrad
02-22-2018, 11:54 AM
Sheesh aren’t the 1099 limits 600 bucks? Might as well call it income and be done with the matter.


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muskiefan82
02-22-2018, 11:59 AM
When will they start taxing the giveaway items at conferences, conventions, and job fairs? I can completely see Ohio sending me a tax bill for a pen I got off a table at a convention. Idiots.

bjf123
02-22-2018, 12:08 PM
I think the state is technically correct. The Reds probably should have paid sales / use tax when they bought the item. It’s not the same as a Happy Meal. There, you’re buying a specific meal to get the toy, so McDonald’s can argue it’s in the cost of the meal. If the Reds lose this, look for lots of states to start doing the same thing. They’re all looking for sources of revenue.


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94GRAD
02-22-2018, 12:10 PM
Caught this news article.

It seems out state government is busy with various important matters - like stadium give aways.

In short, the state claims that a give away item such as a bobble head is a thing of value and somebody needs to pay the sales tax on it.

The reds claim they purchased them to resell to fans and the price of the bobblehead is bundled into the price of the ticket.

The state claims it is not, because the price of the giveaway item isn’t specifically stated, tickets on giveaway days are the same price as tickets on non giveaway days, and the customer can’t get a discount by refusing the giveaway item. (Or no more are available such as in a first 19,000 fans” promotion).

Anyway the state sent the Reds a tax bill for the sales tax liability of the bobble heads. The reds refuse to pay it. It’s now in the Ohio supreme court.

Some say this has far reaching implications, not just to the reds or sports teams but all the way down to the toy in your child’s happy meal.

The reds say, if you charge us for this, start taxing the happy meal toys. Same thing.

Can you provide a link please. Thanks

paulxu
02-22-2018, 03:30 PM
I wonder if Adidas paid taxes on the shoes they give away.

coasterville95
02-22-2018, 03:55 PM
Can you provide a link please. Thanks

I’ll try.

https://amp.cincinnati.com/amp/362382002?__twitter_impression=true

I think the gist is that the reds didn’t pay sales tax to the bobble head company claiming these they were going to resell the bobble heads. The state asked for the sales tax proceeds from the reds and the reds said They bundled it in with the ticket so the tax was collected with the ticket sale.

The state said not so fast and pointed out there is no extra charge for the ticket on bobble head night, and the customer pays the same wether they actually get a bobblehead or not. Therefore the bobble head is value added and this needs to be taxed.

If so, lots of implications for any business that bundles in a premium item with purchase. Depending on how this goes.

I think trade show tchotchkes are safe. While the business is going for future business by giving you the item, you didn’t pay them for that item or any other service or item