Were batting-cage memberships, daily use, and instructor-led baseball lessons subject to South Carolina admissions tax?

Plain-English summary

The South Carolina Department of Revenue split an indoor baseball and softball facility's charges into two categories:

• daily-use and membership fees were taxable admissions because they bought the right to use batting cages, pitching machines, and other amusement facilities; but
• instructor-led lesson charges were not taxable admissions, even when the instructor used those same cages and machines to teach pitching, hitting, catching, or fielding.

The result turned on what the customer was paying for. Independent practice bought use of a place of amusement. A lesson bought instruction designed to improve the student's skills, with the facility and equipment used as teaching tools.

Why daily and membership fees were taxable

Section 12-21-2420 imposed a five-percent tax on paid admissions to places of amusement. Section 12-21-2410 defined admission to include the right or privilege to enter or use a place.

The facility did not charge customers merely to walk through the door, but that did not prevent the tax. Customers paid daily fees or one-, six-, or twelve-month memberships to use the indoor batting cages, pitching machines, turf, and pitching mounds.

The ruling relied on prior Department guidance treating batting machines as places of amusement and on Beach v. Livingston, where the South Carolina Supreme Court treated paid use of bowling lanes as an admission even without a door charge.

Why lesson charges were not taxable

The facility's staff instructors offered lessons aimed at improving baseball and softball skills. An instructor might use a batting cage, pitching machine, or other equipment during the lesson.

The Department followed its longstanding position that a fee paid for instruction is not a fee to enter or use a place of amusement merely because the instructor uses the facility and equipment while teaching. The lesson charge therefore was not subject to admissions tax on the stated facts.

Practical distinction for facility operators

Open practice and memberships

When a customer pays for access to practice independently, the charge is for use of the amusement facility and falls within the ruling's taxable category.

Instructor-led training

When a customer pays for an instructor's teaching and the equipment supports that instruction, the ruling treats the charge as a nontaxable lesson rather than an admission.

Contracts, price lists, booking descriptions, and invoices should clearly distinguish facility access from instructor-led lessons. The ruling did not address a single bundled charge combining open facility access with instruction.

Common questions

Q: Does the admissions tax apply if entry to the building is free?

A: Yes, when the customer pays for the right to use the batting cages or other amusement facilities.

Q: Are monthly or annual memberships treated differently from daily fees?

A: No. Both bought the right to use the facility and were taxable under the ruling.

Q: Does using a pitching machine during a lesson make the lesson taxable?

A: No. The Department treated the equipment as part of the instructor's teaching on the stated facts.

Q: Can another sports facility rely on this PLR?

A: No. It binds agency personnel only for the requesting taxpayer and accurate facts presented.

Citations and references

• S.C. Code Ann. § 12-21-2410 — definitions of admission and place
• S.C. Code Ann. § 12-21-2420 — admissions tax on paid use of places of amusement
• Beach v. Livingston, 149 S.E.2d 328 (S.C. 1966) — paid use of bowling facilities discussed by the ruling
• SC Revenue Ruling #91-14 — batting machines as places of amusement, cited by the ruling
• SC Revenue Ruling #05-14 — instructor-led lesson treatment cited by the ruling

Subject

Baseball and Softball Indoor Facility

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/PLR13-4.pdf

Original ruling text

State of South Carolina

Department of Revenue
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 125, Columbia, South Carolina 29214

SC PRIVATE LETTER RULING #13-4

SUBJECT:

Baseball and Softball Indoor Facility
(Admissions Tax)

REFERENCES:

S.C. Code Ann. Section 12-21-2410 (2000)
S.C. Code Ann. Section 12-21-2420 (2000)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2000)
S. C. Code Ann. Section 1-23-10(4) (2005)
SC Revenue Procedure #09-3

SCOPE:

A Private Letter Ruling is an advisory opinion issued to a specific
taxpayer by the Department to apply principles of law to a specific set of
facts or a particular tax situation. It is the Department’s opinion limited to
the specific facts set forth, and is binding on agency personnel only with
respect to the person to whom it was issued and only until superseded or
modified by a change in statute, regulation, court decision, or another
Departmental advisory opinion, providing the representations made in the
request reflect an accurate statement of the material facts and the
transaction was carried out as proposed.

Questions:

1. Are daily fees or membership fees paid to 123 LLC d/b/a 456 Sports (“Taxpayer”) for use of
   its indoor batting cages and pitching machines subject to the admissions tax under Code
   Section 12-21-2420?
2. Are charges for baseball and softball lessons (pitching, hitting, catching, fielding) provided
   at Taxpayer’s indoor facility subject to admissions tax under Code Section 12-21-2420?
   Conclusions:
3. Yes. Daily fees and membership fees paid to Taxpayer for the use of indoor batting cages
   and pitching machines are subject to the admissions tax under Code Section 12-21-2420.
4. No. Charges for baseball and softball lessons (pitching, hitting, catching, fielding) provided
   at Taxpayer’s indoor facility which may include the use of the batting cage and the pitching
   machine are not subject to the admissions tax under Code Section 12-21-2420.

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Facts:
123 LLC d/b/a 456 Sports (“Taxpayer”), operates a multi-use facility in Horry County, South
Carolina. The facility includes a retail sales store selling sports apparel and equipment. The
store also offers monogramming and embroidery of such apparel. Taxpayer also operates a
premier indoor training facility for baseball and softball. The indoor training facility contains
two full length batting cages that can be divided in half and four individual batting cages with
state of the art pitching machines, full turf and pitching mounds. There is no charge to enter the
facility. There are two different reasons why a person might enter the indoor training facility.
First, a person or group of persons may wish to practice their baseball or softball skills by using
the Taxpayer’s indoor facilities. A person can pay the daily fee and use the facilities only for
that day or a person may buy a membership package for a period of one month, 6 months, or a
year which allows the person the use of the indoor facilities for that time period.
Taxpayer’s location also provides another component other than the mere rental of batting cages
and pitching machines for amusement. The Taxpayer has instructors on staff that offer baseball
and softball lessons designed to improve a student’s mastery of the game. The taxpayer has
three staff instructors who provide lessons to persons who wish to improve their baseball or
softball skills. In connection with the lesson, the instructor may use the batting cages and the
pitching machines to aid in instructing the students and improving their hitting and pitching
skills.

Discussion:
Code Section 12-21-2420 imposes the admissions tax and provides in relevant part:
“There must be levied, assessed, collected, and paid upon paid admissions to places of
amusement within this State a license tax of five percent. The license tax may be listed
separately from the cost of admission on an admission ticket. …”
Pursuant to Code Section 12-21-2410 for purposes of the admissions tax, the term
“‘admission’ means the right or privilege to enter into or use a place or location”[emphasis
added], while the term “‘place’ means any definite enclosure or location”.
The statute does not define the term “place of amusement”, however, the South Carolina
Department of Revenue (“Department”), in SC Revenue Ruling #91-14, has previously
considered whether baseball batting machines were places of amusement. In that revenue ruling,
the Department looked to the dictionary to determine the meaning of the term “amusement”.
The ruling determined that in summary, a “place of amusement: is any enclosure or location
consisting of an activity that occupies one’s spare time, distracts the mind, relaxes, entertains or
gives pleasure.” The ruling goes on to conclude that baseball batting machines are places of
amusement.

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In Beach v. Livingston, 248 S.C. 135, 149 S.E. 2d 328 (1966), the South Carolina Supreme
Court considered whether the use of bowling lanes at a bowling alley was subject to the
admissions tax when there was no charge to be admitted to the bowling alley and the only charge
occurred when a person chose to actually use a lane to bowl a game. The Court focused on the
definition of the term “admission” recognizing that the person was subject to admissions tax
when he made use of the bowling facilities provided. “The word “use” is a verb and such means
to employ for any purpose, to employ for attainment of such purpose or end, to convert to one’s
service or to put to one’s use or benefit.” Esfeld Trucking, Inc. v. Metropolitan Ins. Co., 193
Kan. 7, 393 P. 2d 107 (1964).” The Court concluded that the term “use” in relation to the
admissions tax was applicable to a person who avails himself of the facilities of a place of
amusement, such as bowling alley. See also, SC AG. Op. 81-39 (1981). Therefore, when
Taxpayer allows the mere use of the batting cages, the pitching machines and other baseball and
softball facilities and equipment by third parties, the use of these facilities will be subject to the
admissions tax.
Taxpayer’s location also provides another component other than the mere rental of batting cages
and pitching machines for amusement. The Taxpayer has instructors on staff that offer baseball
and softball lessons designed to improve a student’s mastery of the game. To the extent the
pitching machines, batting cages, and other baseball and softball items and facilities are used in
providing lessons to students as part of the lesson, the use of the pitching machines, baseball
batting cages and other baseball and softball equipment and items is not subject to the
admissions tax. In SC Revenue Ruling #05-14, the Department recognized the longstanding
position of the Department that fees for lessons from an instructor which may use certain
facilities and equipment in providing that instruction are not fees to enter or use a place of
amusement and therefore are not subject to the admissions tax. Accordingly, the use of the
baseball facilities and the equipment by the Taxpayer or its instructors in connection with
providing instruction designed to teach or improve a person’s skill of those games will not be
subject to the admissions tax.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/William M. Blume, Jr.
William M. Blume, Jr., Director
October 11
, 2013
Columbia, South Carolina

CAVEAT: This advisory opinion is issued to the taxpayer requesting it on the assumption that
the taxpayer’s facts and circumstances, as stated, are correct. If the facts and circumstances
given are not correct, or if they change, then the taxpayer requesting the advisory opinion may
not rely on it. If the taxpayer relies on this advisory opinion, and the Department discovers, upon
examination, that the facts and circumstances are different in any material respect from the facts
and circumstances given in this advisory opinion, then the advisory opinion will not afford the
taxpayer any protection. It should be noted that subsequent to the publication of this advisory
opinion, changes in a statute, a regulation, or case law could void the advisory opinion.

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