Are admission fees, shop sales, reproduction charges, and 'Charter Founder'/'Sustaining Member' contributions collected by the Statue of Liberty-Ellis Island Foundation's American Family Immigration History Center subject to New York sales tax?

Plain-English summary

The Statue of Liberty-Ellis Island Foundation, the nonprofit that raised funds to restore the Statue of Liberty and Ellis Island, built the American Family Immigration History Center to let the public research their family's immigration history using computer workstations. Visitors pay a $5 admission fee for a 30-minute research session. The Foundation also runs an on-site "interpretive shop" selling scrapbook binders, genealogy journals, historical maps, and framing material, and it sells copies of ship manifests and other records that visitors find during their research. Separately, the Foundation solicits $45+ contributions from the public to become "Charter Founders" (before the Center opens) or "Sustaining Members" (after it opens), both of which come with the right to use special "documenting" stations and (for an extra fee) get printed scrapbooks, extra paper copies, and CD-ROMs of personal records.

The Department broke this into three pieces. First, the $5 admission fee is exempt — twice over. It qualifies both as an admission that "inures exclusively" to a charitable/educational organization under § 1116(d)(1)(A), and independently as an admission to a historic site or museum under § 1116(d)(3)(C), since the Foundation exists specifically to preserve and interpret the Statue of Liberty and Ellis Island. Second, the interpretive shop's sales — scrapbook binders, journals, maps, framing material, manifest reproductions, and the member scrapbooks/copies/CD-ROMs — are all taxable. Even though the Foundation itself is a tax-exempt organization, New York's "shop or store" rule (20 NYCRR § 529.7(i)) makes retail sales from any regularly-operated sales point taxable regardless of the seller's exempt status. Third, the Charter Founder and Sustaining Member contributions are not taxable at all — the Foundation isn't a social or athletic club, so the payments aren't club "dues," and because they're treated as charitable contributions rather than payment for admission or property, they don't trigger any other sales tax either.

What this means for you

Nonprofits running museums, historic sites, or member-supported programs

Admission charges can be doubly exempt if your organization both (a) is a qualifying charitable/educational organization under § 1116(a)(4) and the proceeds inure exclusively to it, and (b) operates a historic site, house, shrine, or museum. But don't assume that exemption extends to your gift shop or to reproduction/copy services — any regularly-operated sales point is a taxable "shop or store" no matter how exempt the parent organization is.

Organizations soliciting membership-style contributions

A donation-based membership tier (like "Charter Founder" or "Sustaining Member") isn't automatically treated as club dues subject to tax. The key facts here were that the organization wasn't a social or athletic club and the payments were bona fide charitable contributions under IRC § 170 rather than payment for a specific benefit. If your membership tiers instead function like paid access to facilities or services, the analysis could come out differently.

Accountants and tax professionals

This is a clean three-way split under a single set of facts: exempt admission (§ 1116(d)(1) and (3)(C)), taxable shop-or-store sales despite exempt-org status (§ 1116(b)(1); 20 NYCRR § 529.7(i), Example 2), and non-taxable charitable contributions that don't fit the dues or admission categories at all (§ 1105(f)). Useful template for any nonprofit running a combined museum/shop/membership-fundraising operation.

Common questions

Q: Is the $5 admission fee to the genealogy research center taxable?
A: No. It's exempt both as an admission that inures exclusively to a qualifying charitable organization and as an admission to a historic site/museum.

Q: Are the shop's genealogy journals, maps, and scrapbook binders taxable?
A: Yes. Retail sales made through a regularly-operated shop or store are taxable even when the operator is otherwise a tax-exempt organization.

Q: Are copies of ship manifests and other records visitors request taxable?
A: Yes, along with the scrapbooks, extra paper copies, and CD-ROMs sold to Charter Founders and Sustaining Members — these are all treated as retail sales of tangible personal property from the Center's shop or store.

Q: Are the $45 Charter Founder and Sustaining Member contributions taxable?
A: No. The organization isn't a social or athletic club, so these aren't taxable "dues," and since they're treated as charitable contributions rather than a payment for admission or property, no other sales tax applies either.

Q: Can I rely on this ruling for my own museum or nonprofit?
A: No. It binds the Department only for this Foundation's specific facts and can't be relied on by any other taxpayer.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(4) (retail sale)
• Tax Law § 1105(a) (imposition on retail sales)
• Tax Law § 1105(f)(1), (2)(i) (admission charges; social/athletic club dues)
• Tax Law § 1116(a)(4) (charitable/educational exempt organizations)
• Tax Law § 1116(b)(1) (shop-or-store sales remain taxable)
• Tax Law § 1116(d)(1)(A), (d)(3)(C) (exempt-org admissions; historic site/museum admissions)
• 20 NYCRR § 529.7(i) (shop or store rule, incl. Example 2)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2002.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a02_21s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-02(21)S
Sales Tax
July 2, 2002

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S010124A

On January 24, 2001, the Department of Taxation and Finance received a Petition for
Advisory Opinion from The Statue of Liberty-Ellis Island Foundation, 52 Vanderbilt Avenue,
New York, NY 10017-3898. Petitioner submitted additional information with respect to the Petition
on September 25, 2001.
The issues raised by Petitioner, The Statue of Liberty-Ellis Island Foundation, are:
1.

Whether fees paid by visitors to the American Family Immigration History Center
(the "Center") operated by Petitioner for admission to and use of the facilities of the
Center to conduct research on immigration and genealogy are subject to sales tax.

2.

Whether fees paid for reproductions of manifests and other items located by visitors
in connection with their research at the Center are subject to sales tax.

3.

Whether fees donated by individuals to become “Charter Founders” or “Sustaining
Members” of Petitioner are subject to sales tax.

Petitioner submits the following facts as the basis for this Advisory Opinion.
Petitioner is a non-profit corporation that was founded in 1981 to serve as the primary fund­
raiser for the restoration of the Statue of Liberty and Ellis Island. Petitioner is exempt from federal
corporate franchise tax pursuant to section 501(c)(3) of the Internal Revenue Code and from
New York State sales tax on its purchases pursuant to Section 1116(a)(4) of the Tax Law. In
addition to its fund-raising responsibilities, Petitioner is obligated to: (i) ensure the permanence of
the Statue of Liberty; (ii) restore, preserve and protect the Statue of Liberty National Museum; (iii)
acquire records, relics and other items of historic interest related to the Statue of Liberty and Ellis
Island; and (iv) foster, promote and stimulate public knowledge of and interest in the history of the
Statue of Liberty and Ellis Island. In furtherance of these duties, Petitioner restored the Statue of
Liberty, funded and produced Liberty Weekend in 1986 as a celebration of the Statue's 100th
anniversary, and restored the main building at Ellis Island to house the newly created Ellis Island
Immigration Museum.
Currently, Petitioner has undertaken the task of creating an educational venue where
members of the public are encouraged to research their families' connection to Ellis Island. To
accomplish this task, Petitioner is working in conjunction with the National Park Service ("NPS"),
the operator of the Statue of Liberty National Monument, to establish the Center to serve as a source
of immigration and genealogy information. The Center, which is located in the main building at the

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Ellis Island Immigration Museum, will use computer technology to provide access to various
electronic materials that have been produced and collected by Petitioner relating to immigration and
genealogy, including Ellis Island and other immigration records, as well as other family history
resources. This technology will permit visitors to trace their family roots, learning not only the
identity of their ancestors, but also the ships they arrived on, ports of origin, dates of departure and
arrival, and marital status. In the future, Petitioner expects to rehabilitate the Baggage and Dormitory
Building on Ellis Island to allow for an expanded Center.
This project is to be paid for in its entirety by private donations. In order to raise the
necessary funds, Petitioner has asked members of the public to contribute to the launch of the Center
by becoming "Charter Founders." Previously, one could become a Charter Founder by contributing
any amount to Petitioner. However, Petitioner now requires contributions of $45 or more to
become a Charter Founder. Charter Founders' names will be placed in the Register of Charter
Founders which will be kept on permanent display once the Center is officially dedicated. After the
Center opens, Petitioner will ask members of the public to contribute to the Center by becoming
"Sustaining Members." To become a Sustaining Member, Petitioner will require a minimum gift of
$45. Both the Sustaining Members and the Charter Founders will be entitled to use Petitioner’s
documenting stations described below. Petitioner will treat such gifts as charitable contributions
under Section 170 of the Internal Revenue Code.
Initially the Center will contain approximately 40 computer workstations for use by visitors.
These workstations will give visitors the ability to: (1) search records of family members and others
who came to Ellis Island between 1892 and 1924; (2) view images of the ships that brought people
to Ellis Island during those times; (3) explore multimedia presentations about United States
immigration groups, patterns of immigrant origin, and immigration history in general; (4) review
information about resources available to gather additional information about their family history;
and (5) create and maintain digitized family scrapbooks containing documents such as family trees,
family photos, and birth certificates. Printed copies of the actual ship manifests documenting
immigrants' travel to the United States will be made available for a fee. The Center also plans to
make these various activities available to the public over the Internet. Petitioner will charge an
admission fee (currently set at $5) for access to the Center, which will entitle visitors to use a
computer workstation for a thirty-minute session. All of the proceeds collected by the Center will
be used exclusively for the benefit of Petitioner. Petitioner has contracted with NPS to be the sole
operator of the Center.
In addition to the computer workstations, “documenting” stations will be set up at the Center.
Charter Founders and Sustaining Members can use the documenting stations’ equipment to create
archival records of their family's history. The Charter Founders and Sustaining Members will be
permitted to use the computers, scanners and recording equipment at these stations to create digital
records of photographs, personal documents, pages of written text, and short audio recordings to
either contribute to the digital archive or to keep private to the Charter Founder or Sustaining

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Member and their ten designated "Guests." These additional digital records will augment Petitioner’s
database and add a new dimension to its records.
Charter Founders and Sustaining Members will be entitled to print-out copies of their digital
records in the form of a scrapbook at an additional charge. Charter Founders and Sustaining
Members will also be able to purchase additional paper copies and CD-ROM versions of such
records.
The Center will contain an interpretive shop where visitors will be allowed to purchase other
items relating to immigration and genealogical studies. However, the types of items that can be sold
in this shop are limited by Petitioner’s contract with NPS and by the NPS contract with the operator
of the souvenir shop at Ellis Island. Consequently, the Center expects that only products that are
"necessary and appropriate" to the immigration and genealogy functions of the Center and that have
been approved by NPS will be made available. For example, the contract specifically prohibits the
sale of "general merchandise, t-shirts, or other gift shop-type items." Pending approval by NPS, the
Center currently plans to sell the following items in the interpretive shop: binders for family
scrapbooks; journals for genealogical research; and historical maps. Petitioner anticipates that some
visitors may wish to frame copies of the ship manifests and ship images that they have discovered
during their research, and so appropriately sized framing material may also be available at the shop.
Visitors who, during their research at the Center, have identified items of which they would
like copies, including copies of manifests and images of ships on which family members may have
arrived, will be able to obtain copies of these items at the interpretative shop upon payment of the
charge for the reproduction.
Applicable Laws and Regulations
Section 1101(b) of the Tax Law provides, in part:
When used in this article for the purposes of the taxes imposed by
subdivisions (a), (b), (c) and (d) of section eleven hundred five and by section eleven
hundred ten, the following terms shall mean:
*

*

*

(4) Retail sale. (i) A sale of tangible personal property to any person for any
purpose, other than (A) for resale as such or as a physical component part of tangible
personal property . . . .
Section 1105(a) of the Tax Law imposes tax upon:

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The receipts from every retail sale of tangible personal property, except as
otherwise provided in this article.
Section 1105 (f) of the Tax Law imposes tax, in part, upon:
(1) Any admission charge where such admission charge is in excess of ten
cents to or for the use of any place of amusement in the state, except charges for
admission to race tracks, boxing, sparring or wrestling matches or exhibitions which
charges are taxed under any other law of this state, or dramatic or musical arts
performances, or live circus performances, or motion picture theaters, and except
charges to a patron for admission to, or use of, facilities for sporting activities in
which such patron is to be a participant, such as bowling alleys and swimming pools
....
(2)(i) The dues paid to any social or athletic club in this state if the dues of
an active annual member, exclusive of the initiation fee, are in excess of ten dollars
per year, and on the initiation fee alone, regardless of the amount of dues, if such
initiation fee is in excess of ten dollars . . . .
Section 1116 of the Tax Law provides, in part:
Exempt organizations. (a) Except as otherwise provided in this section, any
sale or amusement charge by or to any of the following or any use or occupancy by
any of the following shall not be subject to the sales and compensating use taxes
imposed under this article:
*

*

*

(4) Any corporation, association, trust, or community chest, fund or
foundation, organized and operated exclusively for religious, charitable, scientific,
testing for public safety, literary or educational purposes, or to foster national or
international amateur sports competition . . . .
*

*

*

(b) Nothing in this section shall exempt:
(1) retail sales of tangible personal property by any shop or store operated by
an organization described in paragraph (4), paragraph (5) or paragraph (6) of
subdivision (a) of this section. . . .
*

*

*

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(d) (1) Except as provided in paragraph (2) of this subdivision, any
admissions all of the proceeds of which inure exclusively to the benefit of the
following organizations shall not be subject to any of the taxes imposed under
subdivision (f) of section eleven hundred five:
(A) an organization described in paragraph (4), (5) or (6) of subdivision (a)
of this section . . . .
*

*

*

(3) Admission charges for admission to the following places or events shall
not be subject to any of the taxes imposed under subdivision (f) of section eleven
hundred five:
*

*

*

(C) Any admissions to historic sites, houses and shrines, and museums
conducted in connection therewith, maintained and operated by a society or
organization devoted to the preservation and maintenance of such historic sites,
houses, shrines and museums; provided no part of the net earnings thereof inures to
the benefit of any private stockholder or individual.
Section 529.7(i) of the Sales and Use Tax Regulations provides, in part:
Sales by exempt organizations. (1) Except as provided in paragraphs (2)
through (4) of this subdivision, sales of tangible personal property and services by
exempt organizations are exempt from the sales and use tax.
(2) Retail sales of tangible personal property made by any shop or store
operated by an exempt organization described in section 1116(a)(4), (5) or (6) are
subject to the sales and use tax. A shop or store as used in this section includes any
place or establishment where goods are sold from display with a degree of regularity,
frequency and continuity as well as any place where sales are made through a
temporary shop or store located on the same premises as persons required to collect
tax. Vending machines alone do not constitute a shop or store. However, where
vending machines are located in a defined area devoted to selling tangible personal
property, then sales from such vending machines constitute sales from a shop or
store.
*

*

*

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Example 2: An exempt organization operates a gift shop and book store.
Sales made by such shop or store are taxable.
Opinion
In this case, Petitioner is an organization described in Section 1116(a)(4) of the Tax Law.
Petitioner is working in conjunction with the NPS, the operator of the Statue of Liberty National
Monument, to establish the Center to serve as a source of immigration and genealogy information.
Petitioner has asked members of the public to contribute to the launch of the Center by becoming
"Charter Founders." To become a Charter Founder, Petitioner requires contributions of $45 or
more. After the Center opens, Petitioner will ask members of the public to contribute to the Center
by becoming "Sustaining Members."
Petitioner will charge an admission fee currently set at $5 for access to the Center, which will
entitle visitors to use a computer workstation for a thirty-minute session. In addition to the computer
workstations, documenting stations will be set up at the Center where Charter Founders and
Sustaining Members can use equipment to create archival records of their family's history. Charter
Founders and Sustaining Members will be entitled to print-out copies of their digital records in the
form of a scrapbook at an additional charge. Charter Founders and Sustaining Members will also
be able to purchase additional paper copies and CD-ROM versions of such records.
The Center will contain an interpretive shop where visitors will be allowed to purchase other
items relating to immigration and genealogical studies. Pending approval by NPS, the Center
currently plans to sell the following items in the interpretive shop: binders for family scrapbooks,
journals for genealogical research, historical maps, and framing material. The Center will also
provide copies of manifests and other items to visitors for a fee.
Concerning Issue 1, Section 1116(d)(1)(A) of the Tax Law, provides, with certain
exceptions, that admission charges that inure exclusively to the benefit of an organization described
in Section 1116(a)(4) of the Tax Law, are not subject to sales tax. In addition, Section
1116(d)(3)(C) of the Tax Law exempts from tax any admission charges to historic sites, houses and
shrines, and museums conducted in connection therewith, maintained and operated by a society or
organization devoted to the preservation and maintenance of such historic sites, houses, shrines and
museums, provided no part of the net earnings thereof inures to the benefit of any private
stockholder or individual. Petitioner is an organization described in Section 1116(a)(4) of the Tax
Law. Moreover, Petitioner was formed to restore, preserve and protect the Statue of Liberty and the
Statue of Liberty National Museum, and will operate the Center. Therefore, provided the proceeds
from the admission charges to the Center will inure exclusively to Petitioner, pursuant to Section
1116(d)(1) of the Tax Law, the admission charges to the Center will not be subject to sales tax. It
appears that the provisions of Section 1116(d)(3)(C) of the Tax Law will also apply to admission
charges to the Center.

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With respect to Issue 2, pursuant to Section 1116(b)(1) of the Tax Law, receipts from retail
sales of tangible personal property by any shop or store operated by an organization described in
Section 1116(a)(4) of the Tax Law are subject to sales and use tax. Pursuant to Section 529.7(i) of
the Sales and Use Tax Regulations, a shop or store includes any place or establishment where goods
are sold from display with a degree of regularity, frequency and continuity as well as any place
where sales are made through a temporary shop or store located on the same premises as persons
required to collect tax. Petitioner will be operating a shop or store at the Center as defined by
Section 529.7(i) of the Sales and Use Tax Regulations. Therefore, receipts from the sale of
reproductions of manifests and other items to visitors at the Center will be subject to sales and use
tax. Additional charges made to Charter Founders and Sustaining Members for scrapbooks
containing their records, or for additional paper copies and CD-ROM versions of such records, will
also be subject to sales and use tax as receipts from retail sales of tangible personal property by a
shop or store.
As for Issue 3, pursuant to Section 1105(f) of the Tax Law, dues paid to any social or
athletic club in New York are subject to sales tax if the dues of an active annual member, exclusive
of the initiation fee, are in excess of ten dollars per year. Tax is also imposed on the initiation fee
alone, regardless of the amount of dues, if such initiation fee is in excess of ten dollars. Since
Petitioner is not operating a social or athletic club, the fees paid to become a Charter Founder or
Sustaining Member in Petitioner will not be subject to sales tax as a payment of dues. In addition,
the fees paid to become a Charter Founder or Sustaining Member in Petitioner, which represent
charitable contributions under the Internal Revenue Code, will not be taxable as a payment for
admissions to a place of amusement, a payment for the purchase, rental or use of any tangible
personal property or a payment for any taxable service.

DATED: July 2, 2002

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.