When a racetrack sells one ticket covering both the horse races and a closed-circuit TV showing of an out-of-state boxing match, is the extra charge for the TV event a taxable admission?

Plain-English summary

Sullivan County Harness Racing Association, Inc., proposed to sell a ticket entitling the buyer to admission to the day's harness races and to a closed-circuit television showing of a boxing match taking place outside New York. Its normal race admission is $2.50 (including tax); the combined ticket would be $15.00; a patron who leaves after the races and before the TV event gets a $12.50 refund. It asked how the added charge is taxed.

The Department held the added charge for the closed-circuit TV presentation is a taxable admission (State and Sullivan County), while the race admission is taxed separately under the Pari-Mutuel law.

• Race admission — taxed under the Pari-Mutuel law, not the sales tax. Section 39-a.1 of the Pari-Mutuel Revenue Law (Ch. 254, Laws of 1940) imposes a 4% admission tax on harness-race meetings. Section § 1105(f)(1) imposes the State's 4% sales tax on admission charges over ten cents to a place of amusement, except charges for admission to race tracks, boxing, sparring or wrestling matches that are taxed under another law of this state. So the $2.50 race admission (inclusive of the 4% pari-mutuel tax) is excluded from the sales tax.
• The TV presentation charge — taxable admission. The combined ticket is treated as two separately stated admission charges: $2.50 for the races, and the additional amount as an admission charge for the closed-circuit TV presentation, which is subject to the State § 1105(f)(1) tax and the Sullivan County 3% tax. The tax may be included in the stated charge if the purchaser is advised (20 NYCRR § 532.1(b)); "tax included" language alone is not a separate statement, in which case the whole amount is treated as the taxable charge.
• Variations. If a patron buys admission to the TV presentation alone for $15.00, the full $15.00 is subject to the § 1105(f)(1) and county taxes. Where the association gives a $2.50 refund (cash or a race pass), a cash refund means the customer bought a $12.50 taxable TV admission; a pass refund is taxed the same as the full $15.00 both-events ticket.
• Cost recovery is irrelevant. The association's argument that the amount over $2.50 merely recovers its costs does not change the result.

What this means for you

A closed-circuit TV broadcast is a taxable amusement admission. Charging admission to watch an event on closed-circuit television is an admission "to or for the use of a place of amusement" under § 1105(f)(1) — taxable at 4% State plus any local rate (here 3% county) — even though the live event itself is out of state.

The race-track/boxing carve-out is narrow. Section 1105(f)(1) excludes race-track and boxing charges only when they are taxed under another New York law (here the Pari-Mutuel Revenue Law). The exclusion covered the $2.50 race admission; it did not shelter the separate TV-presentation charge.

Bundle carefully and state the tax. When you sell one ticket covering a non-sales-taxed event and a sales-taxable one, the Department will split it into separate admission charges. Separately state the tax (or properly advise that tax is included under 20 NYCRR § 532.1(b)); "tax included" alone isn't a separate statement, and calling the extra a "cost recovery" won't make it non-taxable.

Common questions

Q: I run a venue and charge admission to a closed-circuit broadcast of a fight. Is that taxable?
A: Yes. It's an admission charge to a place of amusement under § 1105(f)(1) — 4% State plus your local rate — even if the fight is happening elsewhere.

Q: Aren't boxing and racetrack admissions exempt from the sales tax?
A: Only when they're taxed under another New York law (like the Pari-Mutuel Revenue Law for the races). That carve-out covered the $2.50 race admission, not the separate charge for the TV presentation.

Q: Can I just say the extra charge covers my costs?
A: No. The Department held that characterizing the amount over $2.50 as cost recovery doesn't change its taxability as an admission charge.

Citations and references

Statutes:

• Tax Law § 1105(f)(1) — 4% tax on admission charges to a place of amusement; carve-out for race-track and boxing charges taxed under another law
• Pari-Mutuel Revenue Law § 39-a.1 (Ch. 254, Laws of 1940) — 4% admission tax on harness horse race meetings

Regulations:

• 20 NYCRR § 532.1(b) — statement of and reference to tax; when tax may be included in the stated price

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1982.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a82_21s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-82(21)S
Sales Tax
June 7, 1982

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. Z820510A

On May 10, 1982 a Petition for Advisory Opinion was received from the Sullivan County
Harness Racing Association, Inc., Route 17B, Monticello, New York 12701.
Petitioner proposes to sell tickets entitling the purchaser to admission to the day's regular
racing card and, in addition, to admission to a closed circuit T.V. presentation of a boxing match
taking place outside of New York. The normal admission fee charged by Petitioner for admission
to a harness horse race meeting is $2.50, including tax. The admission fee to be charged under the
circumstances described above will be $15.00. Where a patron chooses to leave the premises after
the conclusion of the days's races and prior to the closed circuit T.V. presentation, he will be given
a refund in the amount of $12.50.
Section 39-a.1 of Chapter 254 of the Laws of 1940, the Pari-Mutuel Revenue Law, imposes
an admission tax, as follows:
Every corporation, association or person holding a harness horse race
meeting pursuant to this act shall collect in addition to the admission
price of tickets sold or otherwise disposed of, for each such meeting
held by such corporation, association or person, a tax equivalent to
four per centum of each such admission price; which tax is hereby
imposed.
Section 1105(f)(1) of the Tax Law imposes a 4% sales tax on the following admission
charges:
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 . . . .
Sullivan County imposes a similar tax, at the rate of 3%.
Under the facts presented, Petitioner will in effect be collecting two separately stated
admission charges. One will be a charge for admission to the racing event, amounting to $2.50,
inclusive of the 4% admission tax imposed under the Pari-Mutuel Revenue Law. The additional
amount charged will constitute an admission charge for the closed circuit T.V. presentation and such
charge will be subject to the state and local sales taxes described above. The amount so charged for
the boxing event may include the sales taxes if the purchaser is advised of the taxes being collected.
Section 532.1(b) of the Sales and Use Tax Regulations provides for such statement, as follows:
JAMES H. TULLY., COMMISSIONER
TP-8 (4/80)

LOUIS M. JACOBSON, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

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TSB-A-82(21)S
Sales Tax
June 7, 1982

(b) Statement of and reference to tax.
(1) Whenever the customer is given any sales slip, invoice, receipt, or
other statement or memorandum of the price, amusement charge, or
rent paid or payable, the tax shall be stated, charged and shown
separately on the first of such documents given to him.
. . .
(3) The words "tax included" or words of similar import, on a sales
slip or other document does not constitute a separate statement of the
tax, and the entire amount charged is deemed the sales price of the
property sold or services rendered.
(4) No written receipt. For sales other than sales of gasoline and
diesel fuel a "unit price" method of accounting for sales may be used
where no written receipt is given to the customer. The "unit price" is
the price, including sales tax, at which the sale is recorded. Since the
customer must be made aware of the inclusion of sales tax in the total
sales price, every business establishment employing the "unit price"
method must visibly display, to all customers a placard stating that
the prices of all taxable items include sales tax. If the sale is recorded
on a cash register it may be rung up on a single ring, a quantity of
individual items may be run up in total, or a quantity of items can be
rung up individually with a total. (emphasis added)
Petitioner has also indicated that in the event a customer were to seek admission to the closed
circuit T.V. presentation alone, the admission charge collected would be $15.00. In such event the
full admission charge would be subject to the tax imposed under section 1105(f)(1) of the Tax Law,
as well as the Sullivan County tax. Petitioner has indicated that it is considering the granting of a
refund to a customer attending the TV presentation alone. Such refund would consist of either $2.50
in cash or a pass to a future horse race meeting, such pass having the value of $2.50, inclusive of tax.
Where there is such a cash refund the customer would be purchasing an admission to the T.V.
presentation, at $12.50, and such purchase would be subject to the State and local sales taxes on
admissions. Where the customer is given a pass the taxes due would be the same as those applicable
to the occasion where a customer pays the $15.00 admission fee to attend both the races and the TV
presentation on the same day.
Petitioner has also indicated that it plans to arrange another such joint presentation, with an
overall admission charge of $5.00. The principles set forth herein above would be equally applicable
to such arrangement.

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TSB-A-82(21)S
Sales Tax
June 7, 1982

It is to be noted that Petitioner's contention to the effect that in each case the amount charged
in excess of $2.50 represents a recovery of Petitioner's costs compels no conclusion contrary to that
expressed herein.

DATED: May 20, 1982

s/LOUIS ETLINGER
Deputy Director
Technical Services Bureau