Is a separately stated $1 handling fee on mail-ordered game tickets part of the taxable 'admission charge'?

Plain-English summary

Syracuse University charges a $1.00 handling fee on mail orders for tickets to its home football and basketball games. The fee is assessed only on mail orders for individual-game tickets, is separately noted on the order form, is $1.00 per order regardless of how many tickets are ordered, and covers postage plus the University's cost of processing the order. It asked whether that handling fee is subject to the admission-charge sales tax under § 1105(f)(1).

The Department held the handling fee is a taxable admission charge.

• Admission charges to a place of amusement are taxed. Section § 1105(f)(1) imposes sales tax on admission charges "to or for the use of any place of amusement in the state."
• "Admission charge" is defined broadly. Under § 1101(d)(2), it means "the amount paid for admission, including any service charge and any charge for entertainment or amusement or for the use of facilities" for the event.
• A "handling" label doesn't remove it from the tax. The patron pays the ticket's face value plus the dollar to get in; the extra dollar is part of "the amount paid for admission." That it is denominated a handling charge "is of no moment."
• No transportation-style carve-out exists for admissions. The tangible-personal-property "receipt" definition lets a seller exclude separately stated transportation costs — but the admission-charge definition has no such exclusion. So the fee stays in the taxable base.
• Result: the handling fees are taxable under § 1105(f)(1).

What this means for you

Add-on fees to attend an event are usually taxable admissions. If you run a taxable place of amusement, a service, handling, or processing fee that a patron must pay to obtain a ticket generally rides along with the ticket price into the taxable admission charge. The statutory definition specifically sweeps in "any service charge."

Separately stating a fee doesn't make it nontaxable. For admissions there is no equivalent to the separately-stated-transportation exclusion that exists for sales of goods. Breaking the handling fee out on the order form kept it visible but did not exempt it.

Know which tax base you're in. The rules for a taxable "receipt" on goods and a taxable "admission charge" are not identical. A carve-out that exists on the goods side (separately stated shipping) may have no counterpart on the admissions side — so don't assume an exclusion transfers.

Common questions

Q: We charge a per-order handling fee on mailed ticket orders. Is it taxable?
A: Yes. The Department held a separately stated handling fee is part of the taxable admission charge under § 1105(f)(1), because the definition of "admission charge" includes any service charge paid to attend.

Q: Does it matter that the fee is separately stated as "handling"?
A: No. The Department said the label "is of no moment." Unlike sales of goods, admissions have no exclusion for separately stated handling or transportation charges.

Q: What is included in a taxable "admission charge"?
A: The amount paid for admission, including any service charge and any charge for entertainment, amusement, or use of the facilities (§ 1101(d)(2)).

Citations and references

Statutes:

• Tax Law § 1105(f)(1) — sales tax on admission charges to a place of amusement
• Tax Law § 1101(d)(2) — definition of "admission charge" (includes any service charge)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1983.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a83_27s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-83(27)S
Sales Tax
June 24, 1983

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S820712A

On July 12, 1982 a Petition for Advisory Opinion was received from Syracuse University,
Office of the Comptroller, Skytop Offices, Syracuse, New York 13210.
The issue raised is whether the sales tax imposed under section 1105(f)(1) of the Tax Law
is applicable to handling fees collected by Petitioner when processing mail orders for tickets to its
football or basketball games.
Petitioner imposes a handling fee of $1.00 on mail orders for tickets to its home football or
basketball games. The handling fee is assessed only on mail orders for individual game tickets. The
handling fee is separately noted on ticket order forms. The handling fee covers the cost of postage
connected with mail orders, as well as Petitioner's cost in processing such orders, and is paid when
the ticket order is placed. The fee is $1.00 for each order, irrespective of the number of tickets
ordered.
Section 1105(f)(1) of the Tax Law imposes a sales tax on admission charges "to or for the
use of any place of amusement in the state," with certain exceptions not germane to the present
matter. Section 1101(d)(2) of the Tax Law defines the term "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 thereof."
Section 1105(f)(1) of the Tax Law imposes a tax on "any admission charge," with certain
exclusion not pertinent here. The term admission charge is defined, in section 1101(d)(2) of the Tax
Law as "the amount paid for admission, including any service charge and any charge for
entertainment or amusement or for the use of facilities therefor." Within this context the phrase "the
amount paid for admission" means just that: viz., the amount paid by a patron for a ticket or right
of admission. In the present matter the amount paid is equal to the face value of the tickets plus one
dollar. The fact that the additional dollar is denominated a handling charge is of no moment. It is
significant that in defining the term "receipt," for purposes of the sales tax on receipts from the retail
sale of tangible personal property, the Tax Law provides that such term means the "sale price of any
property . . . without any deduction for expenses . . . and excluding the cost of transportation of
tangible personal property sold at retail where such cost is separately stated in the written contract,
if any, and on the bill rendered to the purchaser." That is, the taxable receipt includes not only the
list price of the article of property but also handling charges and, except where certain formal

JAMES H. TULLY., COMMISSIONER
TP-8 (4/80)

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

-2­
TSB-A-83(27)S
Sales Tax
June 24, 1983

requirements are met, transportation charges. No such exclusion for transportation charges is
contained in the definition of admission charges. In accordance with the foregoing, then, it is
concluded that Petitioner's receipts denominated handling charges, as described above, are subject
to tax under section 1105(f)(1) of the Tax Law.

DATED: June 8, 1983

s/FRANK J. PUCCIA
Director
Technical Services Bureau