Take me out to the ball game! A day at the ballpark is a special way to spend a summer afternoon or evening. There’s nothing like hearing the crack of the ball against a bat and then waiting to see what happens. Home run? Out? Base hit? Foul ball? While fans of America’s favorite pastime are looking forward to an exciting season, some businesses who provide services to customers in Washington, D.C. need to pay attention for another reason – the Baseball Fee.
Businesses with $5 million or more of gross receipts sourced to Washington, D.C. pay a Baseball Fee.
What is the Baseball Fee? When the District of Columbia brought baseball back to the nation’s capital in 2008, they established funding to help build what is now known as Nationals Park by establishing a Baseball Fee. The fee was the same as a tax and had to be paid on time.
When the fee was initially established, only businesses with a physical connection to the district were impacted. But now, businesses have to pay the fee if revenues from services are delivered to customers located in the district, regardless of where the service was actually performed.
Businesses with $5 million or more of gross receipts sourced to the district during their preceding tax year and ending prior to June 15, are required to file Form FR1500 electronically with the district by June 15 each year.
Since June 15 falls on a Saturday, the deadline to file is midnight on June 17.
Fees are assessed based on the following schedule:
Ballpark Fee Schedule
|DC Gross Receipts
|Less than $5,000,000
|$5,000,000 to $8,000,000
|$8,000,001 to $12,000,000
|$12,000,001 to $16,000,000
|$16,000,001 and greater
Changes to the Baseball Fee
Starting with tax year 2015, the district began requiring businesses to apportion income to the district if revenues from services were delivered to customers located there, regardless of where the service was actually performed. This resulted in many companies located outside of the district being subject to the baseball fee that had not been previously subject to it.
Needless to say, this fee has caught taxpayers by surprise. The fee is not incorporated into the district’s franchise tax returns and is not a common tax that might be proactively researched as property taxes or business privilege taxes might be. The company may not even realize it has tripped the filing requirement if their district gross receipts apportionment had been less than $5 million in prior years and was not required to file the return and pay the fee.
Don’t get caught without your glove! Check to see if you are required to file according to these new rules and enjoy the game.