NY TSB-A-14(19)S Sales Tax 2014-07-14

Are tickets to a narrated sightseeing bus tour -- which includes brief staged street performances -- subject to NY sales tax?

Short answer: No -- the bus tour tickets are not taxable. The tax on transportation services doesn't reach bus service (a bus seats 15+ and is excluded from taxable 'livery service'), so the tour isn't a taxable transportation service. And the bus is not a 'place of amusement': riders pay to board and ride the bus, while the brief street acts happen on the street where anyone nearby could watch without paying, so the charge isn't a taxable admission either.

Disclaimer: This is an official New York State Department of Taxation and Finance Advisory Opinion (TSB-A), issued by the Office of Counsel at a taxpayer's request. It is limited to the facts set forth in it and binds the Department only with respect to the petitioner to whom it was issued, and only if that petitioner fully and accurately described all relevant facts; another taxpayer cannot rely on it. It reflects the law, regulations, and Department policy in effect when issued and may since have changed. Taxpayer-identifying details are redacted. New York State and local sales taxes are administered centrally by the Department. This summary is informational only and is not legal or tax advice. Consult a licensed New York tax professional about your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

The Petitioner plans to run narrated sightseeing bus tours in midtown Manhattan. Riders buy tickets for a set date/time; the 75-minute, 4.2-mile tour uses buses with side-facing "coliseum seating," big windows, in-vehicle monitors, and a sound/lighting system. Along the route there are six brief staged street performances (singing/dancing/music by the Petitioner's performers), which riders watch from their seats -- but these acts total less than 10 minutes of the 75-minute tour and happen on the street. The Petitioner asked whether the tour tickets are taxable.

The Office of Counsel concluded the tickets are not subject to sales tax, on two independent grounds:

Not a taxable transportation service. Section 1105(c)(10) taxes transportation services -- carrying people by livery service. But "livery service" excludes bus service (1101(b)(34)). A bus is a motor vehicle seating 15+ passengers besides the driver (TSB-M-09(7)S, 09(2)S). Because the tour is bus service, it's not a taxable transportation service.
Not a taxable admission to a place of amusement. Section 1105(f)(1) taxes admission charges to a place of amusement -- a physical space where amusement is provided (and not a mere device). Here riders pay to board and ride the bus, while the acts happen on the street, where anyone nearby could watch without paying. So the charge is not an admission to or use of a place of amusement, and isn't taxable under 1105(f)(1). (The opinion also notes 1105(f)(1) excludes admissions to live dramatic or musical arts performances.)

Result: the sightseeing bus tour charges are not subject to New York State or local sales tax.

What this means for you

Sightseeing and tour-bus operators

Bus tours are not taxed as transportation services -- bus service is specifically excluded from taxable livery service. If your vehicle seats 15 or more (besides the driver), you're in bus territory. (Tours by smaller vehicles -- limos, vans under that threshold -- can be taxable livery.)

Adding entertainment doesn't automatically create a taxable admission

Bundling performances into a ride doesn't turn the ticket into a taxable amusement admission when the riders are really paying to ride, and the performances occur in a public space others can see for free. If you instead charged admission to a defined amusement space, the analysis could differ.

Mind the vehicle-size line

The 15-passenger threshold matters. Keep it in mind if you mix vehicle types -- a tour run in smaller vehicles could be taxed as livery transportation.

Common questions

Q: Are sightseeing bus tour tickets taxable in New York?
A: No. Bus service is excluded from the taxable transportation-service/livery tax, so the tickets aren't taxable on that basis.

Q: We include live street performances -- does that make it a taxable amusement admission?
A: Not here. Riders pay to ride the bus; the acts are on the street where others can watch for free, so it's not an admission to a place of amusement.

Q: What if we used vans or limos instead of buses?
A: Smaller-vehicle livery service can be a taxable transportation service. The bus exclusion depends on the 15-or-more passenger threshold.

Citations and references

Tax Law section 1105(c)(10) (transportation services)
Tax Law section 1101(b)(34) (definition of livery service; excludes bus service)
Tax Law section 1105(f)(1) (admission charges to a place of amusement)
Tax Law section 1101(d)(10) (definition of place of amusement)

Source

Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2014.htm
Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a14_19s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Counsel
Advisory Opinion Unit

TSB-A-14(19)S
Sales Tax
July 14, 2014

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S140218A

The Department of Taxation and Finance received a Petition for Advisory Opinion from
REDACTED REDACTED REDACTED REDACTED REDACTED REDACTED (Petitioner).
Petitioner asks whether tickets to its bus sightseeing tours, which include staged street performances,
are subject to New York State or local sales taxes. We conclude that Petitioner’s tours are not
subject to sales tax.
Facts
The Petitioner intends to provide bus sightseeing tours in midtown Manhattan. Passengers
will purchase tickets at a predetermined price for a specified date and time from a box office, a
ticket broker, the web, or by phone. The tour is narrated by two guides, runs 75 minutes in duration
and follows a 4.2 mile route. The buses feature “coliseum seating” with the seats facing towards the
side of the bus, and a floor-to-ceiling glass window for optimal viewing. Each bus seats 49
passengers and is equipped with 40 in-vehicle monitors and a state-of-the-art sound and lighting
system to supplement what passengers view on the street.
The tour includes six staged street performances, with each act involving one to two
performers who are employed by the Petitioner. The passengers view these acts from their seats on
the bus. The acts, which may vary over time, are a combination of singing, dancing and musical
performances. While the acts will enhance the overall experience on the Tour, they comprise less
than 10 minutes of the 75-minute tour.
Analysis
Tax Law § 1105(c)(10) imposes sales tax on transportation services, whether or not any
tangible personal property is transferred in conjunction therewith, and regardless of whether the
charge is paid in this state or out of state, so long as the service is provided in this state.
Transportation service is the service of transporting, carrying, or conveying a person or
persons by livery service, subject to exclusions as enumerated in Tax Law § 1101(b)(34). However,
the definition of “livery service” in Tax Law § 1101(b)(34) excludes bus service.
For purposes of the tax on transportation services, the Department has defined a bus as a
motor vehicle with seating capacity of fifteen (15) or more passengers in addition to the driver and
used for the transportation of persons. See TSB-M-09 (7)S; TSB-M-09(2)S. Because transportation
by bus service is not considered a transportation service, Petitioner’s bus tour is not taxable as a
transportation service under Tax Law § 1105(c)(10).

-2-

TSB-A-14(19)S
Sales Tax
July 14, 2014

Sales tax is also imposed on admission charges in excess of ten cents “to or for the use of
any place of amusement in the state, except charges for admission to . . . live dramatic or musical
arts performances. . . .” Tax Law § 1105(f)(1). A “place of amusement” is defined as “[a]ny place
where any facilities for entertainment, amusement, or sports are provided.” Tax Law § 1101(d)(10).
Such places include without limitation
(i)
a theatre of any kind, concert hall, opera house, or other place where a performance
is given;
(ii)
fairground or exhibition hall or grounds;
(iii) golf course, athletic field, sporting arena, gymnasium, bowling alley, shooting
gallery, swimming pool, bathing beach, skating rink, tennis court, handball court,
billiard hall or other place for athletic exhibits.
However, a “place of amusement” has been interpreted to mean a physical space in which
amusement is provided, and not an amusement device. See Bathrick Enterprises v. Murphy, 27
AD2d 215 (3d Dep’t 1967), aff’d 23 NY2d 664 (1968); see also Fairland Amusements v. State Tax
Comm’n, 110 AD2d 952 (3d Dep’t) (Mikoll, J., dissenting), rev’d, 66 NY2d 932 (1985).
The fact that Petitioner’s bus tour includes a performance aspect does not make it a place of
amusement. The patrons are paying to enter and ride the bus, while the acts take place on the street,
and any individual in the vicinity of the performance potentially can view an act without paying the
Petitioner’s charge to enter and ride the bus. Therefore, the charge is not a charge for admission to
or for the use of a place of amusement and is not taxable under Tax Law § 1105(f)(1).
Accordingly, we find that Petitioner’s charges for its sightseeing bus tours are not subject
to New York State or local sales tax.

DATED: July 14, 2014

NOTE:

/S/
DEBORAH R. LIEBMAN
Deputy Counsel

An Advisory Opinion is issued at the request of a person or entity. It is limited to the facts
set forth therein and is binding on the Department only with respect to the person or
entity to whom it is issued and only if the person or entity fully and accurately describes
all relevant facts. An Advisory Opinion is based on the law, regulations, and Department
policies in effect as of the date the Opinion is issued or for the specific time period at
issue in the Opinion. The Information provided in this document does not cover every
situation and is not intended to replace the law or change its meaning.