At a sports and amusement facility, which charges are taxable — participatory sports, trampolines and bounce houses, and birthday parties?

Plain-English summary

A business planning to open a sports and amusement facility (outside New York City) asked which of its charges are subject to sales tax. Patrons won't pay to enter; they'll pay per unit of time for specific activities — trampolining (including trampoline dodgeball, slam-dunk basketball, and foam-pit jumping), volleyball, junior soccer, and bounce houses — and can also book birthday parties with separately billed room, food/drink, sporting activities, and amusement options.

The Office of Counsel split the answer along the line drawn by Tax Law § 1105(f)(1), which taxes admission charges to a "place of amusement" but excludes charges to a patron for the use of facilities for sporting activities in which the patron is a participant:

• Volleyball and junior soccer are participatory sporting activities — not taxable.
• Trampolining, trampoline dodgeball, slam-dunk basketball, foam-pit jumping, and bounce houses are amusement options, not participatory sports — taxable.

For birthday parties, the facility becomes a caterer when it supplies food and drink, so all charges connected to a catered party — including the room and the sporting activities — are taxable as a caterer's "other charge" under § 1105(d)(i). A party that is not catered turns on the activities: a plain room-plus-sports party isn't taxable, but if it includes amusement options the entire package is taxable unless the three-part bundling test is met (the items can be bought separately, the charges are separately stated, and they're reasonable in relation to the total). The facility can buy the party food and drink for resale using Form ST-121.

What this means for you

Trampoline parks, play cafés, and family entertainment centers

The taxability of an activity charge turns on whether the patron is participating in a sport or being amused. Self-directed sports (volleyball, soccer, basketball played as a sport) fall in the exempt § 1105(f)(1) bucket; trampolines, foam pits, and bounce houses are taxable amusement.

Anyone hosting parties or events with food

Once you supply the food and drink, you're a caterer, and essentially every charge tied to the event — room, activities, coordination — rides along as a taxable "other charge." Selling the same room or sport without catering can be non-taxable.

Bookkeepers and tax preparers

For mixed packages, the only way to tax just the taxable piece is to satisfy all three bundling conditions (separately available, separately stated, reasonably priced). Miss one and the whole charge is taxable.

Common questions

Q: We sell wristbands good for both volleyball and the trampolines. Taxable?
A: As a single bundled charge, yes — the whole charge is taxable unless the sport and amusement portions are separately available, separately stated, and reasonably priced.

Q: A birthday party is just the room plus volleyball, no food from us. Taxable?
A: No. Room rental and participatory-sport charges aren't individually taxable, so an un-catered party limited to those isn't taxable.

Q: We add pizza and juice to that same party. Does that change things?
A: Yes. Supplying food and drink makes you a caterer, and the entire party charge — room and sports included — becomes taxable.

Q: Can we buy the party pizza and drinks without tax?
A: Yes, for resale, by giving your vendor Form ST-121; you then collect tax on the catered charge.

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 § 1105(a) (tax on retail sales of tangible personal property)
• Tax Law § 1105(f)(1) (admission charges to a place of amusement; exception for participatory sporting facilities)
• Tax Law § 1101(d)(2) (definition of admission charge)
• Tax Law § 1101(d)(10) (definition of place of amusement)
• Tax Law § 1105(d)(i) (tax on sales of food and drink; caterer charges including other charges)
• 20 NYCRR 527.1(b); 20 NYCRR 532.1(b) (taxable and nontaxable items sold as one package)
• Form ST-121 (Exempt Use Certificate); Publication TB-ST-110 (caterers); Publication TB-ST-860 (bundling)
• Matter of 1605 Book Center, Inc. v. Tax Appeals Tribunal, 188 AD2d 694 (3d Dep't 1992), aff'd 83 NY2d 240 (1994)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales-ao-2020.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a20-58s.pdf

Original ruling text

New York State Department of Taxation and Finance
Office of Counsel

TSB-A-20(58)S
Sales Tax
November 10, 2020

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION
The Department of Taxation and Finance received a Petition for an Advisory Opinion
from [ REDACTED ] (“Petitioner”). Petitioner intends to open a sports and an amusement
facility and asks whether charges to patrons for the right to participate in certain activities at the
facility, and charges related to hosting birthday parties at the facility are subject to State and
local sales and use tax. We conclude that Petitioner’s charges for sporting activities are not
taxable. However, Petitioner’s charges for amusement options, i.e. trampoline related activities
and admission to bounce houses, are taxable. Furthermore, charges related to birthday parties
held at Petitioner’s facility are taxable when Petitioner provides catering services or amusement
options for the party.
Facts
Petitioner intends to open a sports and amusement facility in the State outside New York
City. Petitioner will not charge a fee to enter the premises. Instead, Petitioner will charge its
patrons per unit of time for the following: (1) trampolining activities, including trampoline
dodgeball, slam dunk basketball, and trampoline foam pit jumping; (2) volleyball; (3) junior
soccer; and (4) access to bounce houses. Petitioner asserts that the charges for each type of
transaction will be separate and distinct from each other. Petitioner also will allow customers to
host birthday parties at the facility. In connection with birthday parties, Petitioner will make a
room available to the customer. Petitioner also will give customers the option of having
Petitioner supply the food and drink for the party (e.g., pizza, juice, water, and ice cream), and
having the birthday party guests participate in any of the above activities. Petitioner will charge
the host separately for the room, food and drink, sporting activities, and amusement options.
There will be no snack bar at the facility and Petitioner will purchase the food and drink for the
parties from third parties.
Analysis
Tax Law § 1105(a) imposes sales tax on retail sales of tangible personal property. Tax
Law § 1105(f)(1) imposes sales tax on “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 to a
patron for admission to, or use of, facilities for sporting activities in which such patron is to be a
participant.” Tax Law § 1101(d)(2) defines an “admission charge” as the amount paid for
admission, including any service charge and any charge for entertainment or amusement or for
the use of the facilities therefor. Tax Law § 1101(d)(10) defines a place of amusement as “[a]ny
place where any facilities for entertainment, amusement, or sports are provided.”

-2-

TSB-A-20(58)S
Sales Tax
November 10, 2020

Petitioner’s facility will offer various sporting activities and amusement options,
including trampolining, trampoline dodgeball, slam dunk basketball, trampoline foam pit
jumping, volleyball, junior soccer, and bounce houses. Volleyball and junior soccer are sporting
activities in which patrons will be participants. Consequently, charges for participation in these
activities are exempt from sales tax in accordance with Tax Law § 1105(f)(1). Trampolining,
trampoline dodgeball, slam dunk basketball, and trampoline foam pit jumping are not sporting
activities in which the patron is a participant. Accordingly, Petitioner’s charges for these
amusement options are taxable under Tax Law § 1105(f)(1). In addition, Petitioner’s charges to
the enter the bounce houses constitute admission charges to a place of amusement and are
taxable under Tax Law § 1105(f)(1). See Matter of 1605 Book Center, Inc., v. Tax Appeals
Tribunal, 188 AD2d 694, 696; (3d Dep’t 1992), aff’d, 83 NY2d 240, (1994).
Petitioner also will host birthday parties for which it will collect individual charges for
room rental, sporting activities, amusement options, and/or food and drink. Petitioner does not
have a snack bar and the food and drink will be provided by a third party. Petitioner’s charges
for food and drink are subject to tax. See Tax Law § 1105(d)(i). Petitioner can purchase the
food and drinks for resale exempt from tax if Petitioner provides the vendor with a properly
completed Form ST-121, Exempt Use Certificate.
While Petitioner’s charges for room rentals and sporting activities are not subject to sales
tax, the question arises whether those items are taxable when they are being sold in conjunction
with the taxable sale of food and drink during birthday parties held at Petitioner’s facility. See
TSB-A-02(12)S. When Petitioner provides food, beverages, and other services for a birthday
party, Petitioner meets the definition of a caterer. See TB-ST-110. In general, all charges by
caterers related to a customer's event are taxable. See Id. A caterer’s charges for catering
prepared food and drink and any “other charge” for the coordination of the event are subject to
sales tax under Tax Law § 1105(d)(i). See TSB-A-03(20)S citing TSB-H-86(138)S. Petitioner’s
charge for the use of a room and/or for sporting activities in connection with its catering of a
birthday party falls within the scope of the term “other charge” specified in Tax Law §
1105(d)(i). Id. Consequently, the entire charge for a catered birthday party at Petitioner’s facility
is subject to sales tax.
The taxability of birthday parties that are not catered turns on whether patrons engage in
sporting activities or amusement options. Charges for a birthday party that consists simply of a
room rental fee and charges for sporting activities are not taxable, since charges for room rentals
and sporting activities are not individually subject to sales tax. As for birthday parties at which
patrons partake in any of the amusement options available, when taxable and nontaxable items
or services are sold together as one package, the entire charge is subject to sales tax (See 20

-3-

TSB-A-20(58)S
Sales Tax
November 10, 2020

NYCRR 527.1(b), 532.1(b)) unless the following criteria apply: 1) the taxable and nontaxable
items may be purchased separately, 2) the charges for the items are separately stated on the bill
or invoice, and 3) the charges are reasonable in relation to the total charge. See TB-ST-860. If
all three of these criteria are satisfied, sales tax may be collected only on the taxable items, in this
case the charges for the amusement options.
DATED: November 10, 2020

/S/
DEBORAH R. LIEBMAN
Deputy Counsel
NOTE: 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.