In NYC, there is currently no sales tax on Broadway show ticket sales. For everything else bought and sold in NYC, there is sales tax of 8%. The Broadway show industry has managed to persuade various New York Mayors and New York State Governors to not kill the cash-cow that is Broadway theatre, by bringing in a sales tax. Over the last 100 years, various forms of taxation have been levied against the Broadway theatre industry, but with recent ticket prices getting out-of-hand, the government is, once again, taking a look at instituting a sales tax on Broadway tickets and getting their hands on some of the huge revenue generated from Broadway show ticket sales.
Once in a while (and usually following a new person in office) the Governor or the Mayor of New York City eyes Broadway show ticket sales as a huge tax revenue but the Broadway League (the industry pressure group) has been able to push back, but with Broadway ticket sales now bringing in over 24 Million dollars a week, the argument is getting harder and harder to justify. It seems that everyone in Broadway gets paid and many top shows make huge amounts of money for the show investors, while other Broadway shows do not even come close to breaking even. NY State and NYC are left with making tax revenue from ancillary services, like hotels, restaurants and attractions. It is unclear what the impact of having a sales tax on Broadway tickets would actually do to the industry and Broadway theatre (if anything) as a whole, but charging a fixed 8% sales tax on Broadway tickets could generate as much as $100 Million per year for the city and the state, without actually providing any additional services. Its money for nothing for the government and is very tempting for them.
Tax free sales in NYC are normally reserved for essential products like food and clothing, so its pretty amazing that Broadway has so far avoided being taxed. When Broadway tickets are sold by the official ticket outlets , tax could be applied and sent directly to the state, which is lucrative in itself at $100 Million, but this is only one part of the equation. Every time a ticket is resold by a ticket broker, sales tax could be applied again - meaning that that a ticket could ultimately pay more in tax than its own value before it is actually used - this could mean another $100 Million from the ticket brokers which would be boon to NYC as this will not prescribe any extra pressure on the Broadway show producers, as this tax will be paid by secondary ticket market brokers. This would also claw back some of the money that ticket brokers make from selling tickets over and over for outlandish markups on their price. The government sees no reason why NYC and the state should not benefit from those subsequent ticket broker sales.
In comparison, some live events in NYC are already taxed. All shows at Nassau Coliseum are already taxed. Sports event like the New York Rangers, New Jersey Devils, New York Yankees, New York Mets, New York Giants, The Islanders, The Nets and The Knicks games are also taxed. Even season tickets and the US open tennis championships are already taxed, so why does Broadway get a pass? It may be down to the pressure that The Broadway league can exert on the Governor and the Mayor.
It appears that given the recent success of Broadway, both the Governor and the Mayor may finally cave and bring in the sales tax on Broadway tickets that they expect. Industry pundits expect to see many complaints from Broadway show producers, but with the weekly numbers now pushing $25 Million, their protestations will likely fall on deaf ears.