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The Bobblehead Tax: Cincinnati Reds Court Case Could Impact Promo Industry

The Cincinnati Reds, Ohio tax officials and branded game-day merchandise like player bobbleheads are at the center of an intriguing court case that could send reverberations throughout the promotional products world.

On Wednesday, the Ohio Supreme Court agreed to consider an appeal from the Reds. The Major League Baseball team argues that state tax officials have no legal basis to demand the payment of $88,000 in taxes tied to Reds-branded promotional products that the team provided to fans on game days between 2008 and 2010. The Ohio Department of Taxation, however, is doing just that, saying the Reds owe the levy.

The Reds contend that they're entitled to a resale exception/exemption because they're reselling the items as part of advertised ticket sales. Ohio law exempts companies from paying tax on items they buy to resell.

Lawyers for the Reds explained their position: Team officials identify certain games on the schedule they suspect fans won't be as interested in attending. To beef up ticket sales to such contests, the team advertises – and then provides – bobbleheads, player cards and other Reds-themed memorabilia as part of a fan's ticket purchase. "The price paid for the ticket includes consideration for the promotional item," Reds attorneys say in a court filing. "Accordingly, the Reds purchase of such items is exempt from tax since the items are resold to game attendees."

Ohio tax officials take an altogether different view. They say the Reds didn't resell the promotional items as part of the ticket price, but rather gave them away for free to increase interest in games. As such, the state tax commissioner contends that the promotional items should be taxed because the Reds bought the products to be distributed as freebies and are not, in fact, part of a ticket sale.

To support their position, tax officials say that the ticket price for each particular seat is the same throughout the season, whether a promo item is offered or not. Furthermore, not all patrons are guaranteed that they will get promo merch for a game in which it's advertised because supplies are limited. Relatedly, if a game attendee decides she doesn't want, say, a bobblehead, then her ticket isn't discounted. Given all that, the state Board of Tax Appeals denied an appeal from the Reds.

"We conclude that the Reds have not provided this board with competent and probative evidence in support of the position that it does not owe the assessed tax," board members wrote in their ruling. "It is the decision of the Board of Tax Appeals that the decision of the tax commissioner must be affirmed."

The Reds decided to appeal to the state Supreme Court. There the case rests, awaiting an initial hearing.

Depending on how the court rules, the case could have sweeping implications for the promotional products industry. Should the court side with tax officials, will teams and other businesses in Ohio be discouraged from investing in branded merchandise for game-day promotions and, indeed, other events because they don't want to pay taxes on the items? Could an Ohio ruling in favor of the tax commissioner's findings influence other states to enforce similar actions? Stay tuned.

Trend Alert: College Football Merch

College football is back, and we’re pumped.



Viewing the new season through a swag lens, here’s a quick look at five product categories of branded merchandise – outside traditional top-sellers like hats, hoodies, polos, and T-Shirts -- that are trending hot with collegiate football fans right now.

ELECTRONICS
We’re in the digital age, so it’s no surprise that schools of all sizes are offering everything from tech accessories to actual technology items. We loved the Oregon Ducks’ tech swag, which included this bamboo iPhone case and Bluetooth speaker.


Oregon Ducks Logo Bamboo iPhone 7 Case




Oregon Ducks Bluetooth Speaker

FOOTWEAR
Logoed footwear is growing in popularity with college football fans – and the collegiate market in general. That’s in line with broader trends in the promotional products marketplace, including rising interest in statement socks and flip flops/sliders. We felt the USC Trojans’ branded footwear collection was full of color, verve and style.


[At left-top] Men's Nike Black/Cardinal USC Trojans Free TR V8 Shoes; [At left-bottom] Men's ISlide White USC Trojans Logo Slide Sandals; [At right] Women's Cardinal USC Trojans Logo Sketch Crew Socks

GOLF GEAR
Golf accessories are a hit with alums and boosters. If you do business in the college market and you’re not selling such products, start doing so now. Your bottom line – and client – will benefit. Divot tools, club head covers, ball markers, and even golf bags are among the desired items.


North Carolina Tar Heels Mascot Headcover. Designed to fit most 460cc drivers.


Kansas Jayhawks Switchfix Divot Tool and Poker Chip Ball Marker Set

AUTO ACCESSORIES
You already know that car magnets and car flags are beloved among the college football faithful. But hitch covers have gained a lot of traction in recent years, too. The Clemson Tigers and Texas Longhorns’ offerings bear testimony to that.


[At left] Texas Longhorns Domed Logo Plastic Hitch Cover; [At right] Clemson Tigers Light Up Hitch Cover

OUTDOOR EQUIPMENT & GAMES
Cornhole, camping chairs – yep, they continue to trend in this category beloved of tailgaters. Interestingly, some colleges are branching out with more backyard/patio items, such as fire pits. We could sure picture celebrating a Penn State win on a cool October evening around the flames of this particular product.


Penn State Nittany Lions Fire Pit

HBO Offers Game of Thrones Back to School Swag

Fans pining for the return of the Starks, Lannisters and Targaryens must wait until 2019 for HBO’s final season of Game of Thrones, but that doesn’t mean they can’t enjoy the “Back to School” branded merchandise now available for the hit show. Retailing in the HBO Shop, the collection features everything from a House Stark Stationery Kit to a Night King Black Mug. Here’s a sampling of the wares from Westeros.




The Winter is Coming Stark sigil vacuum bottle features double-wall stainless steel construction, and holds 17oz. of fluid. If the toughest of medieval warriors were to suddenly reanimate and start drinking from travel tumblers, we feel this would be their container of choice. It’s that bada*s-looking.




Of course, we could be wrong about the Stark sigil vacuum bottle. Perhaps the medieval warriors would prefer This Fire and Blood Targaryen sigil 17oz. water bottle, which is equally fierce.




When you see the Night King (here depicted), you know for sure that “Winter is Here.” Good thing, then, that you’ll have this trusty mug to fill with warming tea, coffee or hot cocoa to keep you warm.




You can feel the cold winter winds blowing in over The Wall and withering away the last of the autumn in the starkly beautiful design on this House Stark Stationery Set. It includes much of what you’d need to communicate in the pre-iPhone days of Westeros, including a wax stamp, two wax sticks, envelopes, paperweight, writing paper and display box – all bearing the Stark sigil. Now, all you’ll need is a raven or a rider to carry your message.




Tyrion Lannister’s famous phrase adorns this T-Shirt, which is 100% cotton and printed in California.




Popular character Hodor’s name gets the neon treatment in this new shirt, which is 100% cotton and printed in Michigan.




This hat features the sigil of House Targaryen -- a three-headed dragon. Admittedly, we’re intimidated…




With winter upon Westeros, this 46" x 60" 100% polyester double layer fleece throw blanket featuring character Jon Snow will come in handy. Curl up beneath it and sip from your Night King mug.

Winter is (nearly) Here. Gear up for the final season of GOT!

Starbucks Releases Autumn-Inspired Merch

Starbucks and ban.do teamed up to collaborate on the promotional products collection, which features double-wall travel tumblers, notebooks, a mug and more.

With Labor Day in the rearview, autumn’s pumpkin spice season is officially underway. Starbucks is capitalizing not only with its panoply of pumpkin-spiced goodies, but also with a new fall-inspired branded merchandise collection.


Selections from Starbucks new fall-inspired swag line. Image from Starbucks.

Created in collaboration with lifestyle brand ban.do, Starbucks just released the collection today (Sept. 5). It entails two 24-oz. Starbucks cold cups, two Starbucks double-wall travel tumblers, a ceramic mug, two notebooks and a pencil pouch. The Starbucks-branded swag features images of boots, scarves, umbrellas, flannel shirts, acorns and other items that herald the autumn. Some products also bear a “midnight floral” design.


Image from Starbucks.


The “Midnight Floral” items are available at Target. Image from Starbucks.

Starbucks has previously partnered with ban.do on merch, but the collections were only available in Asia. This time, the swag has come stateside and to Canada. To pick some up, however, you’ll have to go to a Starbucks that’s inside another retailer. The “Midnight Floral” designs are only available at Target.

While the collection was being heralded as cozy and fun by some, others felt the collaboration missed the mark a bit when it came to conveying a true autumn vibe.



Nonetheless, for promotional products pros, the collection is notable on a number of levels. It provides another example of a fast-growing trend – namely, brands collaborating on limited-edition merchandise collections, often at key points in their respective business calendars. (We especially liked the recent Ziploc/BEAMS team-up.) Furthermore, the collection is a creative way to potentially increase foot traffic at Starbucks and partner retail locations. Perhaps more brands in the retail space can take a cue and use limited-edition branded merchandise, available in-store only, to motivate consumers to get out from behind the keyboard and shop brick-and-mortar. At the least, it’s an idea promo pros can consider suggesting to retail clients.


Image from Starbucks.