Are charges for a golf driving range, batting-cage tokens, and professional golf lessons subject to Georgia sales tax?

Plain-English summary

A recreational facility sold buckets of balls for customers to use at its driving range, practice green, and bunker, and sold tokens representing a set number of pitches in batting cages. It also offered individual and group golf lessons from a professional. Customers usually brought clubs, but the facility made clubs available at no extra charge.

The Department ruled:

• Golf-facility charges: taxable charges for participation in a game or amusement activity. Charging by bucket of balls was effectively charging customers to play or practice golf.
• Batting-cage tokens: taxable for the same reason; they purchased participation in a baseball-related amusement activity.
• Professional golf lessons: not taxable because sports instruction was not a service specifically designated as taxable.

The facility was the taxable consumer of clubs, golf balls, baseballs, and other property it used or supplied at no separate charge while providing lessons.

What this means for you

Driving ranges and batting facilities

Charges based on balls, pitches, tokens, or facility use remain taxable when their substance is participation in a game or amusement activity.

Coaches and sports instructors

Separately sold professional instruction was nontaxable, but the service provider owed tax on tangible equipment and supplies used to deliver the lesson.

Common questions

Q: Are buckets of driving-range balls taxable?

A: Yes. The Department treated the charge as payment to participate in golf and as a temporary transfer of the balls.

Q: Are batting-cage tokens taxable?

A: Yes. They purchase a set number of pitches and participation in a game or amusement activity.

Q: Are golf lessons taxable?

A: No. Professional sports instruction was not a taxable service under the authorities applied in the ruling.

Q: Does the facility owe tax on clubs and balls provided during lessons?

A: Yes. As the service provider, it is the consumer of tangible property supplied without a separate charge.

Q: Can another sports facility rely on this ruling?

A: No. It is limited to the requesting facility's activities, charges, and instruction arrangements.

Citations and references

Authorities:

• O.C.G.A. § 48-8-2(17), (31) -- rental, retail sale, and games/amusement charges
• O.C.G.A. § 48-8-3(22) -- personal and professional services
• O.C.G.A. § 48-8-63(b) -- service-provider purchases
• Ga. Comp. R. & Regs. r. 560-12-1-.14(7)(d) -- service providers as consumers

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2016-23

Original ruling text

Date Issued: November 1, 2016
Georgia Letter Ruling: LR SUT-2016-23
Topic: Games and Amusement
This letter is in response to your request for guidance on the application of Georgia sales and use tax to certain sales
made by your client, [Redacted] (“Taxpayer”).
Facts Provided by Taxpayer1
Taxpayer is a facility offering customers the opportunity to practice golfing and batting techniques. The golfing
amenities include a driving range, practice green, and bunker. Customers pay for various sizes of buckets of game
balls for the ability use of the golf facilities. Charges vary according to the number of game balls in each bucket. While
customers typically bring their own golf clubs, Taxpayer has golf clubs available for customer use at no additional
charge. Taxpayer also offers individual or group golf instruction provided by a golf professional, and fees for this
instruction vary according to class size and instruction time. In addition, the facility offers batting cages, where
customer pays for tokens that equal a certain number of pitches.
Issues
1.
2.
3.

Are Taxpayer’s charges for golf balls and the use of a driving range and other golfing amenities taxable?
Are Taxpayer’s charges for tokens and the use of a batting cage taxable?
Are Taxpayer’s charges for golf lessons provided by a golf professional taxable?

Analysis
Georgia levies and imposes sales and use tax (subject to certain specific exemptions) on the retail purchase, retail sale,
storage, use, or consumption of tangible personal property and on certain enumerated services.2 “Retail sale” includes
any sale, lease, or rental unless for resale, and “retail sale” specifically includes charges for participation in games and
amusement activities.3
Taxpayer’s fees for use of golf balls are effectively charges to play golf.4 Likewise, Taxpayer’s fees for tokens
necessary to operate pitching machines are effectively charges to play baseball. These charges are for a customer to
actively play a part of a traditional game with limited instruction. Additionally, the parts of games played in Taxpayer’s
facilities appear to be generally for amusement purposes since they are akin to typical carnival games. Although a
customer may not complete a full golf or baseball game, the use of a driving range or batting cage, in this circumstance,
constitutes participation in a game of amusement activity. 5 Therefore, such charges are taxable retail sales.
Unlike sales of tangible personal property, which are generally taxable, sales of services are exempt unless the service
is specifically designated as taxable. Personal services and professional services are not taxable.6 Moreover, sports
instruction is not a service identified as taxable by statute or regulation. Thus, charges for golf lessons are nontaxable
charges for services. However, service providers are end users of tangible personal property and are liable for tax on
all tangible personal property used by them to perform the service.7 Accordingly, Taxpayer’s purchase of golf clubs,
golf balls, and baseballs provided to the customer at no charge are subject to sales and use tax.
The facts herein are based on information in Taxpayer’s letter ruling request, email correspondence with Taxpayer
on [Redacted Date], and Taxpayer’s website, last accessed [Redacted Date]).
2
O.C.G.A. §§ 48-8-1, 48-8-30.
3
O.C.G.A. § 48-8-2(31).
4
Plainly, Taxpayer’s charges for the use of golf balls are the temporary transfer of tangible personal property to a
customer in exchange for payment. Viewed in this manner, such transactions are leases or rentals that are included
within the terms “retail sale.” See O.C.G.A. § 48-8-2(17).
5
While not directly on point, rules requiring collection of tax on fees at hunting preserves and clubs provide additional
insight into the applicability of sale and use tax to Taxpayer’s charges. Like hunting preserves, Taxpayer’s facilities
provide customers with outdoor areas to practice and improve recreational skills. See Ga. Comp. R. & Regs. r. 56012-2-.113(3)(a) (hunting preserves and clubs allowing the general public to hunt animals in a designated area for a
charge or fee must collect tax on fees for outdoor recreational activities related to hunting animals, such as hunting
stocked and/or wild game, target range shooting, and gear rental).
6
O.C.G.A. § 48-8-3(22).
7
O.C.G.A. § 48-8-63(b); Ga. Comp. R. & Regs. R. 560-12-1-.14(7)(d).
1

Date Issued: November 1, 2016
Georgia Letter Ruling: LR SUT-2016-23
Topic: Games and Amusement
Page 2 of 2

Rulings
1.

Taxpayer’s charges to customers to use golfing facilities are charges made for participation in a game or
amusement activity and, thus, constitute retail sales subject to sales and use tax.

2.

Likewise, Taxpayer’s charges to customers to use batting cages are subject to sales and use tax since they are
charges made for participation in a game or amusement activity.

3.

Sports instruction is not a taxable service. For this reason, Taxpayer’s charges for instruction and lessons provided
by a professional are not subject to sales tax. Nevertheless, Taxpayer is liable for sales and use tax on the purchase
price of all tangible personal property used to provide this instruction service.

The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances and taxpayer in question. Should the circumstances regarding the
transactions change or differ materially from those represented, this ruling may become invalid. In addition, please be
advised that subsequent statutory or administrative rule changes or judicial interpretations of the statutes or rules upon
which this advice is based may subject similar future transactions to a different tax treatment than that expressed in
this ruling.