United States

Bobbleheads spring into Ohio sales and use tax


Popeye. John Cena. U.S. Supreme Court Justice Ruth Bader Ginsburg. Dwight Schrute from The Office. Sidney Crosby. Barry Bonds.

What could these real-life figures and nonfiction characters have in common? Other than what would make an interesting dinner party, all have been permanently memorialized in “bobblehead” form. The bobblehead has existed for at least one hundred years, becoming popular in Major League Baseball around the mid-twentieth century mark, and later finding similar popularity with other sports. The bobblehead gets my nod as one of the most promising fan “giveaways” – I still cherish a Mario Lemieux I picked up at the old Civic Arena two decades ago.

The best part of giveaways is that they are free to the fans – no increased ticket price, and more importantly, no sales tax! But does that mean the giveaways are tax free? Does the team providing the giveaway owe a sales tax on their purchase, or a use tax when removed from inventory for the purpose of the giveaway? The Ohio Supreme Court will address just that issue in determining whether promotional giveaways are tax-exempt under the state’s sales and use tax law as a sale for resale.

Recently, the Ohio Board of Tax Appeals (BTA) found one major league team liable for the tax on bobbleheads and other promotional items purchased to be given away. The team had argued the items were essentially resold to the fans, the price of the item baked into the ticket price. The BTA rejected the argument, finding that the price of the ticket for a particular seat remained the same throughout the season, regardless of whether a giveaway was provided and what the giveaway may have been. Additionally, giveaways were often limited in supply and not guaranteed to each attendee of the event. Finally, the BTA noted that advertising materials clearly indicated that promotional items were either “free” or a “giveaway,” thus not charged to the attendees in any way. Accordingly, the team owed a sales and use tax for its purchase of the items it intended to giveaway.

The Ohio Supreme Court has not yet indicated a date for the first pitch of oral arguments. But we just hope neither side develops too large of a head in the meantime.

Mo Bell-Jacobs


Mo examines state and local tax issues and the impact of legislation on middle market companies. Contact him at mo.bell-jacobs@rsmus.com.

Areas of focus: State and Local TaxWashington National Tax