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Sports Promotions Could Be Taxed Soon

The Supreme Court of Ohio is conducting a hearing the following month to settle the dispute that currently exists between the tax department of the state and the Cincinnati Reds. The case will center on the taxation of all promotion products especially the bobble head dolls which is the most favorite items of the fans. Tax matters are important to business and therefore everyone legible should know how to get a tax ID in Ohio in order to avoid facing legal issues in the future.

What do you need to know about this case? The Cincinnati Reds, though a popular major league team in the sports of baseball, rely greatly on the revenue they are earning from selling tickets to their games. They also have promotional items for sale just like any other teams in every type of sports. Some of Their merchandise includes baseball cards, bobbleheads, wall posters, t-shirts and jerseys among many others. This is also one of their marketing weapons to encourage fans to attend their games.

What is the problem you may ask? These promotional items are not sold separately but rather they are given to fans for free as long as they purchase a ticket to one of their games. Many are now questioning whether these items are really given for free or if there are hidden costs not known to the public. This is the main reason why the litigation started in the first place.

According to the Ohio’s Tax Commissioner, these promotional products come with a value but they are sure that they are given to fans free of charge. In this note, the commissioner said that these items should be subjected to tax because the team is using these in order to increase the sales of their game tickets. The Reds, however, said that the promotional products are actually not given for free but rather the cost is already added on top of the ticket. This all boils down to sales tax and the Reds stand that they must not pay for sales tax since they are not the end user of the items they are selling including the promotional items.

This case should be a lesson to businesses and entities as they learn how to get a tax ID in Ohio in order to avoid getting themselves in the same situation.