Rev. Rul. 59-19

Advice has been requested whether admission tickets to be sold on or after January 1, 1959, may be printed showing the established price for admission to be $1.45 and the Federal tax to be five cents in order to obtain a total charge of $1.50.

Section 4231(1) of the Internal Revenue Code of 1954, as amended by the Excise Tax Technical Changes Act of 1958, Public Law 85-859, effective January 1, 1959, C.B. 1958-3, 92, imposes a tax of one cent for each ten cents or major fraction thereof of the amount in excess of one dollar paid for admission to any place.

Under the prescribed tax rate, the tax on admission would be four cents on an established price of $1.45 and five cents on an established price of $1.46; therefore, it is impossible to have a properly computed total charge of $1.50. Likewise, it is not possible to devise combinations that will result in total charges for admission and tax of $2.05, $2.60, $3.15, and certain larger amounts.

Accordingly, it is held that under section 4231(1) of the Code, as amended, admission tickets may not be printed showing the established price of admission to be $1.45 and the Federal tax to be five cents. The sale of such tickets would result in a collection of a greater amount of admissions tax than that which is legally due. See Mimeograph 5656, C.B. 1944, 635, relating to similar circumstances under prior law.