Memo for fiscal year 2021, updated 2020-02-20

[Archived] Question # 12: What is the admissions tax? Who contributes to this revenue source and if changes were requested, what steps are necessary to update this item?


What is the admissions tax? Who contributes to this revenue source and if changes were requested, what steps are necessary to update this item? (Vice Mayor Bennett-Parker)


To be passed with budget adoption, fee changes that require an ordinance should be docketed for the April 14th City Council legislative meeting, followed by the Public Hearing on April 18th and final passage on April 29th. In order to ensure these changes are included on the April 14 docket ,  Council members considering add/delete items that would require an ordinance provide advance notification no later than April 6th. The add/delete proposal itself would not be due until April 16th. Fees that require an ordinance that do not meet the deadlines for these dates would have to be docketed post-budget adoption at the May legislative meetings, and the budget would have to be adopted without the certainty of the ordinance’s passage. City staff recommends no change to this rate.


As part of the FY 2006 Budget Adoption (May 2005), the City established an Admissions Tax of ten percent of any admission charged, not to exceed $0.50 per person (Title 3, Chapter 2, Article W of the Code of Virginia).  The tax is imposed on admission charges for events occurring within the City.  An event is any amusement, entertainment, performance, exhibition or production open to the general public.  Examples of events include movies, theatre productions, musical events or concerts, amusement attractions, circuses, carnivals, as well as lectures, readings or symposia. 


The City is granted the authority under its Charter, and pursuant to Va. Code § 58.1-3840; however, the City’s Admission tax must conform to the classifications of taxable events as defined in the Virginia Code (Va. Code § 58.1-3817).  The City currently has no ability to craft other exemptions or classifications.  In 1999, the City’s Legislative Package included an attempt to establish the designation of motion pictures played in theaters as a separate class of events.  This was not approved.  There is no State maximum on the amount the City can charge for the Admissions Tax.


The Code of Virginia categorizes admissions in six distinct categories, and the Admissions Tax must be applied at the same rate to all Admissions within single categories.  Localities are permitted to differentiate the rate by category.  In Alexandria, the Admissions tax is only applied to the last category.  All others are excluded by City Code.   The exact State Code language is reflected here: 


1)         Admissions charged for attendance at any event, the gross receipts of which go wholly to charitable purpose or purposes.

2)         Admissions charged for attendance at public and private elementary, secondary, and college school-sponsored events, including events sponsored by school-recognized student organizations.

3)         Admissions charged for entry into museums, botanical or similar gardens, and zoos.

4)         Admissions charged to participants in order to participate in sporting events.

5)         Admissions charged for entry into major league baseball games and events at any major league baseball stadium which has seating for at least 40,000 persons.

6)         All other admissions    


Current FY 2020 projected revenue is $0.5 million and FY 2021 estimated revenue is projected to remain flat at $0.5 million. An increase to the current Admissions Tax rate would require an ordinance to amend Section 3-2-383 of Title 3, Article W of Article R of the Code of the City of Alexandria. Fee related ordinance changes require a first reading and a public hearing prior to a final vote and adoption.

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