Kasich’s sales tax idea has local fairs nervous

The phrase “fair taxes” could take on a whole new meaning if a recent proposal by Ohio Gov. John Kasich comes to fruition.

The proposal aims to have dozens of previously exempt services and entertainment industries charging a 5 percent sales tax to their customers, including the local fairs.

“It would sure be an inconvenience,” said Paul Barth, president of the Washington County Fair Board.

One concern is that the change would require fairs to charge customers a tax on their admission fees, meaning people who typically paid $8 a day to get into the fair would have to shell out $8.40 instead.

“You’d have to keep a lot of extra change on the gate,” said Barth.

However, Gary Gudmundson, Ohio Department of Taxation communications director, said be believed the taxation would only apply to admission fees for fairs that run more than six days. The annual county fair runs four days over the Labor Day holiday.

“If the fair runs six days or fewer, there is an exemption on admission tax,” he explained.

That would mean the fairs in Washington County would be exempt but those attending the Ohio State Fair and other large events may have to pay more.

The rule would still require fair officials to tax vendors who are renting space at the fair to sell their wares, said Gudmundson.

That in turn could discourage vendors or force them to readjust prices, said Barlow Fair Board member and former fair board treasurer Sidney Brackenridge.

“If they are going to have to pay sales tax for renting their space, they might have to pass that cost on to their customers,” he said.

The Washington County Fair cannot afford to lose income from vendors, said Barth.

Rain has destroyed fair attendance for the past two years, explained Washington County Fair Board Treasurer Sandra Hickey.

And while rain was the main culprit, the fair has also been losing outside exhibitors – companies that pay to advertise their wares outside the fair, said Barth.

Under Kasich’s proposal, either the vendors would pay more in taxes, or the local fair boards would have to eat the cost to keep the price unchanged.

“The fair is our moneymaker, where we make all of our money to operate all year. If we don’t do well at the fair, then we don’t have any operating funds left,” Hickey said.

The fair actually lost money in 2011 and 2012, and now the Washington County Fair Board members are hoping for a good year to help them rebuild a financial cushion, she said.

Luckily, the fair has already contracted its amusement services for the 2013 fair, said Barth.

But ride companies will be subject to the new tax proposal, said Gudmundson. That means fair boards could eventually see a price increase when renting rides.

Additionally, many ride companies charge fairgoers for individual ride tickets or passes, a fee which will also be assessed a tax, said Gudmundson.

“I hate to see anybody losing money. You’ve got to have some to put back for a rainy day,” said Dennis Martin, fair board president of the Waterford Fair.

There are a lot of specifics that would need to be ironed out if Kasich’s plan were to be made law, said Brackenridge.

For example, whether there would be a tax on entry fees to fair contests or whether Fair Board events outside of the fair itself would be subject to tax is in question.

“These are things we need clarification on,” Brackenridge said.