Does a batting-cage operator charge sales tax on batting-practice fees, on bat/helmet rentals, and does it owe tax on the pitching machines?

Plain-English summary

"The Battery" (in Rochester) lets customers use pitching machines that propel softballs or baseballs for batting practice, operated either by the operator's employees or by the customers. It asked whether it must collect sales tax on the batting-practice charges — and, in turn, how its own equipment is treated.

The Department gave a three-part answer:

• Batting-practice charges are not taxable. The amusement-admission tax excepts charges for admission to or use of facilities for sporting activities in which the patron is a participant — expressly including bowling alleys and swimming pools (Tax Law 1105(f)(1)). Batting practice is a sport involving substantial physical exercise, and the operator's premises are a "place of amusement" providing sports facilities (20 NYCRR 527.10(b)(3)). So the participation charges are exempt (Matter of Green Meadow Stables).
• Service charges bundled into the admission follow the admission. The exception also covers any service charge that is part of the admission (20 NYCRR 527.10(b)(1)(i)) — the regulation's example is a per-ticket parking charge that's part of the admission whether or not the patron parks. If the admission isn't taxable, neither is that service charge.
• Separately rented equipment is taxable; the machines are taxable to the operator. If the operator separately charges to rent bats or batting helmets, those rental receipts are taxable (Tax Law 1105(a)); it may buy that rental equipment tax-free for resale with a resale certificate (Form ST-120; 20 NYCRR 532.4). But there is no exemption for the operator's purchase of the pitching machines and related equipment or parts — as the end consumer, the operator owes state and local sales or use tax on those.

What this means for you

Charges to play a sport are exempt; charges to rent gear are not. The fee for the batting-practice activity itself rides on the participant-sport exception. But once you break out a separate rental of bats or helmets, that's a taxable rental of tangible personal property.

Match your purchases to how you use the items. Equipment you rent out to customers can be bought tax-free for resale (Form ST-120), because you're reselling its use. But equipment you use to provide the service — the pitching machines themselves and their parts — is consumed by you, so you pay sales or use tax on it.

Bundled service charges follow the admission. A service charge that's part of a nontaxable admission isn't taxable either. The line to watch is between a charge that's part of the admission and a genuinely separate rental.

Common questions

Q: Do I collect tax on the fee to use the batting cage?
A: No. It's a charge for a participant sporting activity, exempt under 1105(f)(1), like bowling or swimming.

Q: I rent bats and helmets for an extra charge. Taxable?
A: Yes — those are taxable rentals of tangible personal property. You can buy that rental equipment tax-free for resale with Form ST-120.

Q: Do I owe tax when I buy the pitching machines?
A: Yes. There's no exemption for the machines or their parts. You're the end consumer and owe sales or use tax on them.

Citations and references

Tax Law:

• 1105(f)(1) — taxes amusement admissions but excepts charges for admission to/use of facilities for participant sporting activities (e.g., bowling alleys, swimming pools)
• 1105(a) — imposes sales tax on rentals of tangible personal property (bat/helmet rentals)

Regulation:

• 20 NYCRR 527.10(b)(3) — "place of amusement": any place providing facilities for entertainment, amusement, or sports
• 20 NYCRR 527.10(b)(1)(i) — a service charge that is part of an admission follows the admission's taxability (parking-charge example)
• 20 NYCRR 532.4 — resale certificate (Form ST-120)

Prior decision cited:

• Matter of Green Meadow Stables, State Tax Commission (Dec. 10, 1976), STH 77-17 — participant sporting activity charges are not taxable admissions

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1985.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a85_41s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-85(41)S
Sales Tax
September 9, 1985

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S850719A

On June 20, 1985, a Petition for Advisory Opinion was received from "The Battery" 1520
Spencerport Road, Rochester, New York 14616.
The issue raised is whether Petitioner is required to collect sales tax on amounts charged to
customers for the use on its premises of machines which propel softballs or baseballs for batting
practice. The machines can be operated either by employees of Petitioner or by the customers.
Section 1105(f) of the Tax Law imposes taxes on: "(1) 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, such as bowling alleys and swimming pools."
The definition of a "place of amusement" contained in Regulations Section 527.10(b)(3):
"Any place where any facilities for entertainment, amusement or sports are provided" is descriptive
of Petitioner's business operation.
Petitioner's customers engage in batting practice, a sport involving substantial physical
exercise. Accordingly, Petitioner's charges to patrons for participation in sporting activities, and the
use of facilities therefor, are not subject to tax as admissions under Section 1105(f)(1) of the Tax
Law. (Matter of Green Meadow Stables, Decision of the State Tax Commission, Dec. 10, 1976, STH
77-17).
This exception also applies to any service charge that is part of the admission charge.
Regulations Section 527.10(b)(1)(i) offers the following example:
Example 2:

An admission charge includes 75¢ per ticket for parking whether the
patron does or does not avail himself of the parking privilege. This
charge is shown as a separate item on every ticket. The parking
charge is considered a part of the admission charge whether it is
separately stated or not. Consequently, if the admission is not taxable,
neither is the service charge.

If Petitioner, in addition to the admission ticket, charges for the rental of equipment (i.e. bats
or batting helmets) such receipts are subject to the sales tax. No tax is due on Petitioner's purchases
of equipment used in such taxable rentals. To avail itself of this exemption Petitioner should present
vendors with a properly completed Resale Certificate (Form ST-120).

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

-2­
TSB-A-85(41)S
Sales Tax
September 9, 1985

However, it is to be noted that no exemption is provided for Petitioner's purchases of the
pitching machines and any related equipment or parts. Petitioner, as the end consumer, is liable for
the applicable State and local sales or use taxes on the acquisition of such property.

DATED: August 19, 1985

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth herein.