Is admission to an indoor children's play center taxable, and does the 75% 'qualifying place of amusement' exemption apply?

Plain-English summary

Several operators run indoor children's play centers in New York strip-mall/mall spaces -- bounce houses, climbing structures, foam blocks, slides, games, and (at one location) a Lazer Tag arena. A day ticket lets a child (ages 2-11) use the whole facility. They asked whether their places are "qualifying places of amusement" under Tax Law section 1122, entitling admission charges to the 75% exemption.

The Office of Counsel concluded the admissions are taxable and the 75% exemption does not apply:

• They are "places of amusement." A place with facilities for entertainment/amusement is a place of amusement (Tax Law section 1101(d)(10)), and charges over 10 cents to enter are taxable admission charges (section 1105(f)(1)).
• They are NOT "qualifying places of amusement." Section 1122 exempts 75% of admission only where: (1) the place is year-round at a fixed location; (2) admission lets patrons ride at least 75% of the amusement rides; (3) the rides' area (with walkways, queues, structures) is at least 50% of the place; and (4) tickets show the charge and tax. "Amusement rides" means roller coasters, Ferris wheels, carousels, water slides and the like, in a fenced, primarily outdoor place.
• The play centers have no rides -- bounce houses, climbing structures, foam blocks, and games have no moving ride apparatus, no water element, and are entirely indoors, not within a fenced perimeter. So section 1122 doesn't apply.
• Each operator is a "recipient" of taxable amusement charges and a person required to collect tax -- it must register (section 1134) and collect tax on the full admission charge.

What this means for you

Indoor play centers, trampoline parks, FECs

A day-pass / admission to use your attractions is a taxable amusement charge -- collect tax on the full price. Your adult-not-charged / child-charged structure doesn't change that.

The 75% exemption is for ride parks, not play centers

Section 1122 targets amusement-ride parks -- mechanical/water rides, mostly outdoors, in a fenced footprint where rides are 50%+ of the area and the ticket covers 75%+ of the rides. Bounce houses and climbing equipment are not "rides," so indoor play centers don't qualify.

Register and collect

If you make amusement charges in New York, you must register for sales tax, collect on the full ticket, and file/remit.

Common questions

Q: Is admission to my indoor play center taxable?
A: Yes -- it's a taxable admission charge to a place of amusement. Collect tax on the full price.

Q: We have lots of attractions -- can we get the 75% exemption?
A: No. Section 1122 requires actual amusement rides (coasters, carousels, water slides) in a fenced, primarily outdoor place. Bounce houses and climbing structures aren't rides.

Q: We only charge children, not adults -- does that matter?
A: No. The charges you do make to enter the place of amusement are taxable in full.

Q: Can I rely on this opinion?
A: It binds the Department only as to the petitioner. Use it as guidance and confirm your own facts.

Citations and references

• Tax Law section 1105(f)(1) (sales tax on admission charges to a place of amusement)
• Tax Law section 1101(d)(10) (definition of place of amusement)
• Tax Law section 1122 (75% exemption for a qualifying place of amusement)
• Tax Law section 1134 (registration; person required to collect tax)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2015.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a15_29s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-15(29)S
Sales Tax
July 15, 2015

Office of Counsel
Advisory Opinion Unit
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S130625A

The Department of Taxation and Finance received Petitions for Advisory Opinion from
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ED (Petitioner C); (Petitioners A, B, and C; together, “Petitioners”). Petitioners each ask
whether their separate places of business are a "qualifying place of amusement" under Tax Law §
1122, and whether admission charges to Petitioner's places would qualify for the 75% exemption
from the sales tax on admission charges.
We conclude that Petitioners’ places of business are each a place of amusement but they
are not qualifying places of amusement. Thus, Petitioners’ charges to patrons to enter the places
are taxable as admission charges, and the Tax Law § 1122 75% exemption does not apply to
such admission charges. Each of the Petitioners must be registered for sales tax purposes and
collect State and local sales taxes on the full amount of their admission charges.
Facts
Each Petitioner owns and operates a place of business in New York. Each sells tickets
that entitle children ages 2 to 11 to admission to their place and to use the entire facility for the
day. Petitioners charge admission for any child that will use or play at the facility. All children
must be accompanied by an adult guardian to enter the facility. If a child older than 11 would
like to play with the younger ones, they must also purchase an admission ticket. Adults are not
charged admission.
Each place exists on a year-round basis at its location in the state. The admission charge
to each place entitles patrons, without additional charge, to use all of the climbing structures,
bounce houses and various games and activities at the place. Petitioners’ locations are each
located in retail strip malls or inside an enclosed mall. All locations are entirely indoors. Each
location has bounce houses, bouncing and jumping areas, giant foam blocks, climbing features,
slides, and separate party rooms. One location has a ten-foot by ten-foot Light Space Play Floor
where more than 20 games can be played. That location also has an enclosed 1,000 square foot
Lazer Tag arena that can hold up to 14 players at a time.
Petitioners each indicate that the “combined geographic area of the amusement rides
located at such place, including all fenced-in ride areas, walkways to and among the rides, areas
where patrons wait in line for the rides and all buildings, structures, machinery, equipment and
ancillary facilities associated with the rides equals at least fifty percent of the entire geographic
area of such place.” Each Petitioner provides to each person to whom it delivers tickets for

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TSB-A-15(29)S
Sales Tax
July 15, 2015

admission to the place a ticket or paper receipt stating the amount of the admission charge paid
by the person and the tax due thereon.
Analysis
Tax Law § 1105(f)(l) imposes sales tax on any admission charge (in excess of 10 cents)
to or for the use of any place of amusement in New York State. Tax Law § 1101(d)(10) defines
"place of amusement" as any place where any facilities for entertainment, amusement, or sports
are provided. Tax Law § 1101(d)(2) defines “admission charge” as the amount paid for
admission, including any service charge and any charge for entertainment or amusement or for
the use of facilities therefor.
Petitioners’ places of business are each a place of amusement because they have facilities
for entertainment and amusement, such as climbing structures, bounce houses and various games
and activities. Petitioners each charge their child patrons a charge in excess of 10 cents to enter
their places of amusement and to use the games and other facilities for entertainment and
amusement at the place. Thus, each petitioner is making admission charges to a place of
amusement in this State and those charges are subject to State and local sales taxes. Each
Petitioner acknowledges that its place is a place of amusement and that its charges to enter the
place are admission charges. But Petitioners assert that each of their places is a “qualifying place
of amusement” and that 75% of the admission charge should be exempt from tax pursuant to Tax
Law § 1122.
Tax Law § 1122 exempts from the sales tax on admission charges seventy-five percent of
the charge to a "qualifying place of amusement.” Under § 1122, a place is a "qualifying place of
amusement'' if: (1) it exists on a year-round basis (whether or not it is open year round) at a fixed
location in the state; (2) the admission charge to the place entitles patrons to ride at least 75% of
the amusement rides at the place, without additional charge; (3) the combined geographic area of
the amusement rides at the place, including all fenced-in ride areas, walkways to and among the
rides, areas where patrons wait in line for the rides and all buildings, structures, machinery,
equipment and ancillary facilities associated with the rides, equals at least 50% of the entire
geographic area of the place; and (4) it provides to each person, to whom it delivers an admission
ticket, a ticket or paper receipt stating the amount of the admission charge paid by such person
and the sales tax due thereon. See TSB-M-04(7)S.
The "entire geographic area of such place" shall include only areas within the perimeter
fencing of the place that are generally accessible to the public and that are accessible only by
paying the charge for admission to the place and shall exclude administrative areas, parking lots,
hotels, campgrounds and picnic areas, lakes, woodlands and other undeveloped areas and areas
devoted to retail activities, such as games, arcades, and food, beverage, souvenir and
merchandise sales. This definition contemplates facilities that are located primarily outdoors.

Tax Law § 1122 describes "amusement rides" as including roller coasters, Ferris wheels,
carousels, water slides and all other amusement rides and water rides. Petitioners’ climbing
structures, bounce houses, foam blocks, and various games are not rides at all. They do not have
any moving apparatus. None of them feature water elements. None of them are located outdoors

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Sales Tax
July 15, 2015

in a fenced perimeter. There are no buildings, structures, machinery, equipment, and ancillary
facilities normally associated with amusement rides. Thus, the 75% exemption in Tax Law §
1122 does not apply to Petitioners’ amusement charges because petitioners do not have
amusement rides at their business places and because those business places are all located
entirely indoors and are not areas within a fenced perimeter.
Because each Petitioner makes taxable amusement charges to its customers in New York,
it is a “recipient” under Tax Law § 1101(d)(11). As a recipient, each Petitioner is also a “person
required to collect tax” under Tax Law § 1131(1). As a person required to collect tax, each
Petitioner must register for sales tax purposes under Tax Law § 1134(a) and collect tax on the
full price of its tickets sold to its customers and file returns and remit tax required to be collected
under Tax Law §§ 1136 and 1137.

DATED: July 15, 2015

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.