NY TSB-A-14(26)S Sales Tax 2014-07-28

Is a flat fee to use a golf simulator a taxable admission to a place of amusement, or a non-taxable charge to use a device?

Short answer: It is not taxable. The flat fee is a charge for the use of the golf simulator -- a device -- not an admission charge to enter the place where the simulators are located. A charge to use an amusement device is not subject to sales tax under Tax Law section 1105(f)(1), so the simulator fee is not taxable.

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 owns and operates a golf simulator business -- a facility with four golf simulators, a bar, and limited food service. Each simulator is run by its own computer and has a large screen the golfer hits a ball into; the computer then simulates the shot (distance, accuracy) on a depicted course. The Petitioner charges a flat fee to use a simulator (the public can use them; players may use their own clubs or borrow some free). It asked whether that fee is subject to sales or use tax.

The Office of Counsel held the simulator fee is not taxable:

The admission tax. Section 1105(f)(1) taxes admission charges to a place of amusement. An "admission charge" is the amount paid for admission to the place (1101(d)(2)); a "place of amusement" is any place providing facilities for entertainment, amusement or sports (1101(d)(10)).
Use of a device, not admission to a place. The Petitioner's flat charge is for using the golf simulator itself, not for admission to the location where the simulators sit. So it is not an admission charge and not taxable under 1105(f)(1). A charge for the use of such a device is not subject to tax (Fairland Amusements; Bathrick Enterprises).

Result: the fee to use the simulator is not taxable.

What this means for you

Operators of simulators, games, and amusement devices

A charge to use a particular device (a golf simulator, a coin-op game, a ride) is generally not a taxable admission -- the admission tax hits charges to enter a place, not to operate a machine. If a customer pays you to use the equipment rather than to get in the door, that fee is typically not taxable under 1105(f)(1).

Watch the structure of what you charge for

The distinction is device use vs. door admission. If you instead charged a general admission to enter the facility (a place of amusement), that admission could be taxable. Here, there was no separate door charge -- just a per-use simulator fee.

Other taxes may still apply

This opinion is only about the admission tax on the simulator fee. Other parts of the business (e.g., sales from the bar and food service) have their own sales-tax treatment.

Common questions

Q: We charge customers to use our golf simulators. Is that taxable?
A: No. A charge to use the simulator (a device) is not a taxable admission charge under section 1105(f)(1).

Q: What would make it taxable?
A: If you charged a separate admission to enter the place of amusement, that admission charge could be taxable. A charge just to use the device is not.

Q: Does it matter that customers can use their own clubs or borrow ours?
A: No. The key point is that the fee is for using the simulator device, not for admission to the location.

Citations and references

Tax Law section 1105(f)(1) (admission charges to a place of amusement)
Tax Law section 1101(d)(2) (definition of admission charge)
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_26s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-14(26)S
Sales Tax
July 28, 2014

Office of Counsel
Advisory Opinion Unit

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S121031A

The Department of Taxation and Finance received a Petition for Advisory Opinion
from REDACTED REDACTED REDACTED REDACTED REDACTED REDACTED
REDACTED. Petitioner asks whether its fee charged to a customer to use a golf simulator
game is subject to State or local sales and compensating use tax. We conclude that
Petitioner’s fee to use its golf simulator game is not subject to State or local sales or use
tax.
Facts
Petitioner is the owner and operator of a golf simulator business. The golf
simulator facility has four golf simulators, a bar, and limited food service. The golf
simulators are each run by a separate computer, and each has an 11 foot tall, 17 ½ foot
wide, 25 foot deep screen into which a golfer hits the ball. After the ball is hit into the
screen, the computer program simulates the related attributes of that particular golf shot,
including distance and accuracy. The simulator screen depicts the golf course being played
on (of the many courses to choose from), and shows tee boxes, fairways, greens, and
bunkers. Petitioner charges a flat fee to use a simulator. Use of the simulator is open to
the public. Customers may use their own golf clubs for simulator play. Petitioner also
offers the use of golf clubs and balls at no charge for golfers who do not have their own.
Analysis
Section 1105(f)(1) of the Tax Law imposes sales tax on any admission charge to or
for the use of any place of amusement in the State. Section 1101(d)(2) of the Tax Law
defines admission charge as “[t]he amount paid for admission, including any service
charge and any charge for entertainment or amusement or for the use of facilities therefor.”
Section 1101(d)(10) of the Tax Law defines place of amusement as “[a]ny place where any
facilities for entertainment, amusement, or sports are provided.” Petitioner’s flat charge is
for the use of its golf simulator, not for admission to the place where the golf simulators
are located. Thus, this charge is not an admission charge, and it is not subject to tax under
Tax Law § 1105(f)(1). Rather, the flat charge is for the use of the golf simulator. The
charge for the use of such a device is not subject to tax. See Fairland Amusements v State

-2-

TSB-A-14(26)S
Sales Tax
July 28, 2014

Tax Commn., 110 AD2d 952 (3d Dep’t), rev’d 66 NY2d 932 (1985); Bathrick Enterprises
v Murphy, 27 AD2d 215 (3d Dep’t 1967), aff’d 23 NY2d 664 (1968). Accordingly,
Petitioner’s fee for use of the simulator is not taxable.

DATED: July 28, 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.