The Citizens Research Council of Michigan published a study this week, Evaluating Local-Option Admissions Taxes in Michigan, examining how an admissions tax on sports and entertainment venues could help offset some of the costs of providing public services that support these venues and their visitors.

The paper examines the economic impact of events, estimates admission tax revenue, discusses tax design and policy considerations, compares revenue generation with comparable cities, and evaluates the advantages and disadvantages of local-option taxes, as well as the viability of Michigan implementing an admissions tax.

Commissioned by the City of Detroit’s Legislative Policy Division, the paper focuses not only on Detroit but also on several other Michigan cities that could benefit from revenues generated by an admissions tax. These revenues could be used to provide benefits such as property tax relief and to invest in attracting future national events to Michigan.

IN A NUTSHELL

 -- Detroit is one of the few major cities in the U.S. that does not levy an entertainment/ amusement/admissions tax. While this means the city is not taking advantage of a revenue source commonly used by other cities, it also means that the city can learn from the processes and experiences of others.

 -- Depending on how an authorizing state law would define the base and the tax rates authorized, Detroit could yield upwards of $50 million from an admissions tax.

 -- Revenue from an admissions tax could be used to enhance city services, diversify the city’s revenue streams, provide property tax relief, and put into a fund that could be used to draw major national events to the city.

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