The short answer is yes, in most cases it is legal to resell tickets at a higher price than the original face value. However, there are some important caveats and regulations that ticket resellers need to be aware of. In this comprehensive guide, we will explore the ins and outs of reselling tickets legally and maximize your profits while staying compliant with the law.
Is it legal to resell tickets?
Reselling tickets is legal in the United States, as long as the tickets were obtained through authorized and legitimate channels. The first sale doctrine gives the ticket holder the right to resell or dispose of the tickets however they want after the original purchase. As the lawful owner of the tickets, you are entitled to sell them at any price you want, even at a premium above face value.
However, certain states do prohibit ticket scalping under specific circumstances. Scalping laws restrict how and where you can resell tickets, especially for popular events. Some states ban resellers from selling tickets above face value on the property or within a certain distance from the venue. Others require resellers to be properly licensed. Be sure to check your local regulations before reselling any tickets.
Are there limits on how much I can resell tickets for?
There are no federal laws that limit ticket resale prices in the secondary market. Once you legally purchase event tickets, you can technically resell them for any price the market will bear, no matter how high. Supply and demand generally dictate secondary market prices, which is why tickets for hot events like playoffs or concerts can command exorbitant premiums.
However, price gouging laws in some states do prohibit selling tickets at an “unconscionably excessive” price during an emergency or special event. Exact thresholds vary, but price gouging often involves raising prices to more than 10-25% of the original cost. While resellers still have flexibility to set their own prices, massive markups could potentially violate these consumer protection laws in some places.
Does it matter where I resell the tickets?
Where you resell event tickets can impact the legality according to some state laws. Many states restrictticket scalping onsite or around the venue vicinity. For example, in New York it is illegal to resell tickets within 1,500 feet of the event site. Florida bans the practice within 500 feet. Check your local scalping laws to ensure you sell tickets in permissible areas only.
Selling online via secondary markets like StubHub or Craigslist offers more flexibility and mitigates venue restrictions. As long as both the buyer and seller are located in states where online ticket resales are legal, transactions through reputable internet platforms are generally acceptable.
Do I need a license or permit to resell tickets?
Some states require resellers to obtain a license or permit to legally resell tickets, especially if conducting sales onsite near the venue. For example, in North Carolina you must register with the state revenue department and pay an annual $25 fee. Florida requires getting a county license to peddle tickets.
Failing to acquire the proper licensing can lead to civil or criminal consequences in regulated states. Penalties can include fines, having tickets confiscated, or even misdemeanor charges. Make sure to research the licensing rules in your state before engaging in any ticket resales.
Are there special rules for sporting events and concerts?
Two of the most popular tickets for resale are for sporting events and concerts. These mass events often have special rules and restrictions that resellers must follow:
Sporting Events: Many leagues like the NFL and MLB have implemented ticket transfer policies that require the original ticket purchaser to accompany their guests. Ticket holders cannot sell their seats outside of authorized league exchanges. Violating these terms can get tickets canceled without refund.
Concerts: Some artists and promoters explicitly prohibit reselling tickets to their concerts. Language is often printed on the ticket restricting transfers. If caught reselling non-transferrable tickets, you may forfeit the tickets.
Check the fine print before reselling any tickets to major games or shows. Beyond the venue policies, season ticket holders who violate league transfer rules could lose their season tickets.
Can I get in trouble for selling fake tickets?
Selling counterfeit or fake tickets under false pretenses is always illegal. Fake ticket scams rob buyers of their money in exchange for useless tickets that will be denied at the door. These fraudulent activities can lead to criminal charges including:
– Theft by deception
– Forgery
– Fraud
Beyond just being unethical, fake ticket sales ruin your credibility and reputation. Once discovered, buyers will leave bad reviews that damage any future reseller business endeavors. Maintain integrity by only reselling verified authentic tickets.
Is reselling tickets just a shortcut to making lots of quick cash?
Despite perceptions, reselling tickets is not necessarily an easy shortcut to making lots of quick money. Like any business, it requires significant time, effort, and risk to generate sustainable profits. Some key considerations to keep in mind:
– You need access to hot tickets in high demand early during presales to maximize value. This could require hours spent online waiting for presale ticket releases.
– Popular tickets being resold at high markups also attract lots of competition from other resellers, lowering your potential profit margins.
– Listing fees, shipping costs, and payment processing fees can considerably eat into your earnings from resold tickets. Large brokerage platforms also charge commission.
– Situations like event cancellations and fluctuating ticket demands add financial risk and uncertainty.
With dedication and skill, reselling tickets can certainly be lucrative. But patience and effort is required to buy the right inventory, price it strategically, and operate the business successfully. It is not a simple get-rich-quick scheme.
Can I deduct expenses related to reselling tickets for tax purposes?
If you treat reselling tickets as a business for tax purposes, you may be able to deduct some expenses from your profits to lower your tax liability, including:
– Cost of acquiring the tickets
– Fees and commissions paid to online selling platforms
– Credit card processing fees
– Sales tax paid on ticket purchases
– Advertising costs
– Postage and shipping expenses
You would report this income and any related deductions on IRS Schedule C. But if ticket resale is just a side hobby generating minimal extra income, you generally cannot deduct associated expenses. Consult a tax professional to ensure you properly account for ticket resales on your taxes.
Do I need to worry about reporting ticket sales or income to the IRS?
You do need to consider federal tax implications when reselling tickets either occasionally or as a business. Here is quick guidance:
Reselling Rarely: If you only sell tickets once in a while to events you cannot attend, occasional sales totaling less than $600 per year do not need to be reported.
Reselling Regularly: If you frequently resell tickets during a tax year and accumulate gross proceeds of over $600, you must report the income on Form 1099-MISC.
Large Volume Reseller: Buying and selling tickets on a regular basis as a profit-making business requires reporting gross revenues as self-employment income on Schedule C. You would also claim allowed business expense deductions.
While state requirements vary, you may also need to report ticket resale activity for state tax purposes. Track your ticket sales closely so you can properly document income and pay any resulting taxes owed.
Can I be held liable if I sell tickets that turn out to be counterfeit?
If you unknowingly sell counterfeit tickets you purchased believing they were authentic, you likely would not face criminal liability. However, you could still be sued in civil court by the ticket buyers for compensation under false pretenses.
To avoid this liability, only resell tickets that were:
– Purchased directly from the venue, artist, or authorized primary seller.
– Obtained from a trusted secondary market ticket provider like StubHub or VividSeats that verifies authenticity.
– Validated as legitimate by the venue when first purchased. Get confirmation in writing if possible.
Scrutinize tickets carefully before reselling them. Establishing a paper trail showing tickets were bought through reputable channels provides a record if any authenticity issues later arise.
Conclusion
Reselling event tickets is legal in most cases but regulated in some states. While tickets can be resold at any mutually agreed upon price, avoided exorbitant markups that violate price gouging laws. Understand all licensing requirements based on the location of sales. Only sell through permissible secondary markets and avoid onsite venue sales that violate scalping laws.
Authenticating all tickets being resold is crucial to avoid being liable for any counterfeits. Keep detailed records of your ticket income and expenses for proper tax reporting as a business or individual. With some due diligence on local regulations and wise business practices, reselling tickets can be a lucrative endeavor.