Online Ticket Sites Deemed Marketplace Facilitators for Sales to Live Events in Arkansas

Summary: The Arkansas Tax Appeals Commission ruled that an online ticket platform was required to collect and remit sales tax from sales of tickets to live in-person events in the state under the state’s marketplace facilitator rules.

The Arkansas Tax Appeals Commission (the Commission) recently determined that a taxpayer was liable for sales tax as a marketplace facilitator for the sale of tickets to live, in-person events in Arkansas sold through the taxpayer’s online platform. [1]

A Closer Look at the Marketplace Facilitator

The taxpayer provided event organizers with an online platform to list, advertise, and sell admissions to their events around the world. The online platform connected potential customers with the events, enhancing the organizers’ ability to attract attendees and simplifying the sale and purchase process for both the organizers and the attendees.

While these operations and the functionality of the taxpayer’s online platform are typically hallmarks of a business that meets the definition of a “marketplace facilitator,”[2] in this case, the taxpayer argued that Arkansas’ marketplace facilitator definition did not include businesses that sold tickets to live, in-person events in the state. Arkansas’ sales tax applies to sales of:

• Tangible personal property, specified digital products, or a digital code
• Admissions to places of amusement, recreational, or athletic events or privileges of access to or the use of amusement, entertainment, athletic, or recreational facilities
• Services specifically identified as taxable[3]

A Deeper Dive into the Ruling on Sales to Live Events

Arkansas defines a “marketplace facilitator,” in part, to mean a person “that facilitates the sale of tangible personal property, taxable services, a digital code, or specified digital products.”[4]

While the taxpayer did not contest that sales of tickets to live, in-person events are subject to sales tax in Arkansas, it argued that the obligation to collect the tax as a marketplace facilitator applies only to sales of “tangible personal property, taxable services, a digital code, or specified digital products.” The taxpayer argued that the sale of admissions to live, in-person events is not covered by this language, as the imposition statute separately categorizes taxable admissions and taxable services. 

The state, however, argued that the phrase “tangible personal property, taxable services, a digital code, or specified digital products” is “umbrella language,” and that this phrase or substantially similar language is used repeatedly in the tax code to generally describe what is subject to sales tax. Among others, the state noted the following examples:

• The term “sales price” means “the total amount of consideration . . .for which tangible personal property, specified digital products, a digital code, or services are sold.”[5]
• The term “seller” means “a person making a sale, lease, or rental of tangible personal property, specified digital products, a digital code, or services.”[6]

The state’s position is that if the “umbrella language” did not include admissions, then such sales would have no “sales price” and those that sell admissions would not meet the definition of a “seller” required to collect and remit the tax.

The Commission agreed with the state, explaining that tax statutes must be interpreted to avoid “absurd” results that are contrary to legislative intent or the purpose of the statute and notes the following language from an Arkansas Supreme Court decision:

Statutes relating to the same subject should be read in a harmonious manner, if possible…. In construing any statute, we place it beside other statutes relevant to the subject matter in question and ascribe meaning and effect to be derived from the whole…. Finally, we seek to reconcile statutory provisions to make them consistent, harmonious, and sensible.[7]

Therefore, the Commission concluded that if the statutes are read together with the intent of the legislature in mind, then admissions must be encompassed within the umbrella language, and accordingly, the marketplace facilitator statute applies to the taxpayer in this case.

Final Thoughts: It’s All About Context in Sales Tax

This decision illustrates an important principle when analyzing tax statutes —context matters. While the taxpayer’s interpretation of statutes may have held technical merit, the Commission ultimately determined that the legislature intended for marketplace facilitator rules to apply broadly to any type of taxable sale facilitated through an applicable marketplace.  

However, it’s worth noting that not all states’ marketplace facilitator rules apply to all taxable sales. For instance, New York does not require marketplace facilitators to collect tax on sales of taxable services, restaurant food, hotel occupancies, or admissions to places of amusement. [8]

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[1]Arkansas Tax Appeals Commission Docket No. 23-TAC-02021, 01/24/2025.

[2]Please refer to this article from Aprio’s November/December 2019 SALT Newsletter for more information about marketplace facilitator definitions.

[3]See Ark. Code Ann. § 26-52-508(a).

[4]Ark. Code Ann. § 26-52-103(21) (emphasis added)

[5]Ark. Code Ann. § 26-52-103(19)(A).

[6]Ark. Code Ann. § 26-52-103(32).

[7]Citing Dep’t of Fin. & Admin. v. Wilson, 2024 Ark 25, 7-8 (March 7, 2024).

[8]NY TSB-M-19(2.1)S, 10/17/2019.