Editing Openai/69177b63-caec-8000-a009-8936c37238c5 (section)

===== Given your scenario: you’re holding a tournament for the Pokémon TCG, participants pay an entry fee, and there’s no guarantee that every entrant wins a prize (so it’s more like a typical tournament with winners and prizes rather than everyone gets something). You ask: do you charge sales tax on the entry fee, or handle it another way? =====

Things to think about based on the exception:
* Is the entry fee substantially greater than what would normally be paid for use of the facility? (That is: if you just used the venue for “normal” use, would the fee be much lower? The rule suggests the contest/competition component is key.)
* Is the fee being paid to compete in a contest, where part of the fee offsets cost of conducting the contest and for prizes? That’s part of the first exception.
* Alternatively, is the individual one who would not normally use the facility or pay a fee except for participation in this contest? That’s the second exception.

If either of those exceptions apply, then the entry fee may not be taxable as an amusement service admission. Legal Information Institute<ref>{{cite web|title=Legal Information Institute|url=https://www.law.cornell.edu/regulations/texas/34-Tex-Admin-Code-SS-3-298|publisher=Legal Information Institute|access-date=2025-11-17}}</ref>

In your case: the entry fee is being paid to participate. That aligns somewhat with “paying to compete in a contest.” The question is whether the fee “substantially exceeds what would normally be paid for use of the facility,” and whether part of the fee is explicitly for the contest and prizes. Also, whether the venue use is incidental vs. the primary purpose being the contest.

If it doesn’t meet the exception (for example, if the fee is similar to a normal facility-use fee, or there is no significant “contest” component recognized), then the fee may be taxable as an “admission to an amusement service.” If taxable, then you must collect sales tax on the fee.