Under SC Revenue Ruling 91-14, did a coin-operated batting cage owe admissions tax and an amusement-machine license tax?

Plain-English summary

South Carolina Revenue Ruling 91-14 reached a split result for coin- or token-operated baseball batting cages:

• the charge to enter or use the batting cage was subject to the historical admissions tax because the cage was a place of amusement; but
• a batting machine on which admissions tax was imposed was exempt from both categories of historical C.O.D. amusement-machine license tax.

The admissions-tax policy applied from March 14, 1990. The machine-license exemption applied to licenses issued after August 31, 1991.

The batting-cage arrangement

A participant paid to enter a cage equipped with a mechanical pitching device. Some machines used prepaid tokens; others accepted the participant's coins. Activating the device caused it to pitch baseballs for the participant to try to hit.

Why admissions tax applied

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

Because the statute did not define “amusement,” the Commission used ordinary and dictionary meanings: an activity that occupies spare time, distracts, relaxes, entertains, or gives pleasure. It also cited Beach v. Livingston, where the South Carolina Supreme Court applied admissions tax to charges for using a bowling alley, and a 1956 Attorney General opinion treating golf-driving-range charges as taxable admissions.

On that reasoning, the Commission continued its policy that a batting cage was a place of amusement. The tax applied to the paid right to use the cage, whether activation required coins or prepaid tokens.

Why the machine license did not apply

Section 12-21-2720 imposed separate historical license taxes on specified coin-operated amusement devices. Before the amendment discussed in the ruling, Department guidance had moved from a $25 classification in Technical Advice Memorandum 90-8 to a $100 classification under Revenue Ruling 90-9.

The amended statute expressly said that batting machines on which admissions tax was imposed were exempt from item (1). The Commission concluded that the legislature intended to remove those machines from both the $25 and $100 C.O.D. license categories; otherwise the amendment would be defeated.

What this means for you

Batting-cage operators

Under the historical ruling, collect and report admissions tax on the amount charged for the participant's right to use the cage. Do not treat token use as removing the charge from admissions tax.

Amusement-machine license teams

For licenses issued after August 31, 1991, a batting machine already subject to admissions tax was not subject to either historical C.O.D. license amount addressed by the ruling.

Current operators

Do not assume the 1991 rates or licensing structure remain current. Verify today's admissions-tax and amusement-machine provisions.

Common questions

Q: Was a batting cage a “place of amusement”?

A: Yes. The Commission treated the paid right to use the cage as an admission to a place offering an entertaining or pleasurable activity.

Q: Did it matter whether the machine accepted coins or prepaid tokens?

A: No. The ruling described both arrangements and reached the same admissions-tax conclusion.

Q: Was the batting machine subject to the $25 C.O.D. license?

A: No, when admissions tax was imposed on it and the license was issued after August 31, 1991.

Q: Was it subject to the $100 C.O.D. license instead?

A: No. The ruling concluded that the statutory amendment exempted qualifying batting machines from both license categories.

Q: What guidance did RR 91-14 replace?

A: It superseded SC Technical Advice Memorandum 90-8 and explained the effect of the later statutory amendment after Revenue Ruling 90-9.

Citations and references

• S.C. Code Ann. § 12-21-2410 — historical admissions-tax definitions
• S.C. Code Ann. § 12-21-2420 — historical admissions tax
• S.C. Code Ann. § 12-21-2720(1) and (2) — historical amusement-machine license taxes
• S.C. Code Ann. § 12-4-320 — ruling authority
• SC Technical Advice Memorandum 90-8 — superseded prior guidance
• SC Revenue Ruling 90-9 — intervening amusement-machine classification guidance
• Beach v. Livingston, 248 S.C. 135, 149 S.E.2d 328 (1966)
• South Carolina Attorney General opinion dated August 2, 1956
• Hughes v. Edwards, 265 S.C. 529, 220 S.E.2d 231 (1975)
• Investors Premium Corp. v. South Carolina Tax Commission, 260 S.C. 13, 193 S.E.2d 642 (1973)

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR91-14.pdf

Original ruling text

SC REVENUE RULING #91-14

SUBJECT:

Coin Activated Baseball Batting Machines
(Admissions Tax and C.O.D. License)

TAX ANALYST:

Deana West

EFFECTIVE DATE:

With respect to conclusion 1, the effective date is
March 14, 1990.
With respect to conclusion 2, the effective date is
August 31, 1991.

SUPERSEDES:

SC Technical Advice Memorandum #90-8

REFERENCE:

S.C. Code Ann. Section 12-21-2420 (Supp. 1990)
S.C. Code Ann. Section 12-21-2720 (As Amended 1991)
SC Revenue Ruling #90-9

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (Enacted June 1991)
SC Revenue Procedure #87-3

SCOPE:

A Revenue Ruling is the Commission's official interpretation of how tax
law is to be applied to a specific set of facts. A Revenue Ruling is public
information and remains a permanent document until superceded by a
Regulation or is rescinded by a subsequent Revenue Ruling.

Questions:
1.

Are coin activated baseball batting machines subject to the admissions tax imposed under
Code Section 12-21-2420?

2.

Are coin activated baseball batting machines subject to the C.O.D. license tax imposed
under Code Sections 12-21-2720(1) or (2)?

Facts:
Baseball batting machines exist whereby a participant pays to enter a batting cage equipped with
a mechanical pitching device. Some of these batting machines require prepurchased tokens or
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coins to activate the pitching device, and others allow the participant to deposit their own coins
to activate the device. After activating the device, the player uses a bat to attempt to hit the
pitches.
Discussion:
The first issue regarding the applicability of the admissions tax to baseball batting machines
requiring tokens or coins has been previously addressed in South Carolina Technical Advice
Memorandum #90-8. The discussion below reviews the Commission's continuing policy
regarding this issue.
Code Section 12-21-2420 reads, in part:
There shall be levied, assessed, collected and paid upon all paid admissions to all
places of amusement within this State a license tax of...four percent...

The tax imposed by this Section shall be paid by the person or persons paying such
admission price...
Code Section 12-21-2410 defines various terms found in the article and reads, in part:
For the purpose of this article and unless otherwise required by the context:
(1) The word "admission" means the right or privilege to enter into or use a place or
location;
(2) The word "place" means any definite enclosure or location; and
(3) The word "person" means individual, partnership, corporation, association or
organization of any kind whatsoever.
The statute, however, does not define the term "amusement".
One of the primary rules of statutory construction is that words used in a statute should be taken
in their ordinary and popular meaning, unless there is something in the statute which requires a
different interpretation. Hughes v. Edwards, 265 SC 529, 220 SE2d 231 (1975); Investors
Premium Corp. v. South Carolina Tax Commission, 260 SC 13, 193 SE2d 642 (1973). Also,
where the terms of a statute are clear and unambiguous and leave no room for construction, they
must be applied according to their literal meaning. Mitchell v. Mitchell, 266 SC 196, 222 SE2d
217 (1976); Green v. Zimmerman, 269 SC 535, 238 SE2d 323 (1977).

2

It is an accepted practice in South Carolina to resort to the dictionary to determine the literal
meaning of words used in statutes. For cases where this has been done, see Hay v. South
Carolina Tax Commission, 273 SC 269, 255 SE2d 837 (1979); Fennell v. South Carolina Tax
Commission, 233 SC 43, 103 SE2d 424 (1958); Etiwan Fertilizer Co. v. South Carolina Tax
Commission, 217 SC 484, 60 SE2d 682 (1950).
Black's Law Dictionary, Fifth Edition, defines the term "amusement" to mean: "Pastime,
diversion, enjoyment. A pleasurable occupation of the senses or that which furnishes it."
The Second College Edition of the American Heritage Dictionary provides the following
definitions:
"Amusement"

-

1.
2.

The state of being amused, entertained, or pleased.
Something that amuses.

"Pastime"

-

An activity that occupies one's spare time pleasantly.

"Diversion"

-

Something that distracts the mind and relaxes or entertains.

"Enjoyment"

-

1. The act or state of enjoying.
2. The use or possession of something beneficial or
   pleasurable.
3. Something that gives pleasure.

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 statute taxes charges to "use" a place of amusement, as well as charges to enter a place of
amusement. This is seen in Beach v. Livingston, 248 SC 135, 149 SE2d 328 (1966), whereby the
Supreme Court held that the admissions tax applied to charges paid for the "use" of a bowling
alley. Additionally, an Attorney General's Opinion dated August 2, 1956 (See Attorney General's
Report, July 1, 1955 to June 30, 1957) concluded the charge made by a person operating a golf
driving range was subject to the admissions tax.
Therefore, it continues to be the policy of the Tax Commission to regard baseball batting
machines as places of amusement.
The second issue is whether coin activated baseball batting machines are subject to a C.O.D.
license tax. This issue was also addressed in South Carolina Technical Advice Memorandum

90-8. The Commission's policy regarding this issue has been revised as a result of a recent

change in the governing statute.

3

Code Section 12-21-2720 states, in part:
Every person who maintains for use or permits the use of, on any place or premises
occupied by him, any of the machines or devices described below shall apply for
and procure from the South Carolina Tax Commission a license for the privilege of
making use of every such machine in South Carolina and shall pay for the license a
tax of twenty-five dollars for each machine described in item (1) of this section...
(1) Any machine for the playing of music or kiddy rides operated by a slot or
mechanical amusement devices and juke boxes wherein is deposited any coin or
thing of value. Batting machines on which an admissions tax is imposed are exempt
from the provisions of this item. (emphasis added)
(2) Any machine for the playing of amusements or video games, without free play
feature, or machines of the crane type operated by a slot wherein is deposited any
coin or thing of value, and any machine for the playing of games or amusements,
which has a free play feature, operated by a slot wherein is deposited any coin or
thing of value and the machine is of the nonpayout pin table type with levers or
"flippers" operated by the player by which the course of the balls can be altered or
changed. (emphasis added)
This code section, as amended with respect to baseball batting machines, is effective for licenses
issued after August 31, 1991.
The Tax Commission's interpretation of Code Section's 12-21-2720 applicability to baseball
batting machines, prior to its' amendment, can be found by reviewing several policy documents.
SC Technical Advice Memorandum #90-8, issued March 14, 1990, concluded baseball batting
machines were subject to the $25 C.O.D. license fee imposed under Code Section 12-212720(1). Subsequently, SC Revenue Ruling 90-9, issued September 6, 1990, established
guidelines to assist in determining the proper license tax to impose on various types of
amusement machines. This Revenue Ruling superseded SC Technical Advice Memorandum

90-8 and concluded that machines without a free play feature were subject to the $100 C.O.D.

license fee imposed under Code Section 12-21-2720(2). Such guidelines would subject baseball
batting machines to the $100 C.O.D. license.
In light of the conclusions reached in the policy documents discussed above, we must consider
the intention of the legislature to exempt baseball batting machines from any C.O.D. license fee
when they amended Code Section 12-21-2720(1). ".[A] construction adopted should not be such
as to nullify, destroy, or defeat the intention of the legislature". 73 Am. Jur. 2d, Statutes Section
145.
Therefore, due to a change in the Code Section 12-21-2720, baseball batting machines will be
exempt from both the $25 and $100 C.O.D. licenses.

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Conclusions:
1.

Coin activated baseball batting machines constitute "places of amusement" and are subject
to the admissions tax imposed by Code Section 12-21-2420.

2.

Coin activated baseball batting machines on which an admissions tax is imposed are not
subject to the $25 or $100 C.O.D. license tax imposed by Code Sections 12-21-2720(1)
and (2), respectively.

SOUTH CAROLINA TAX COMMISSION
s/S. Hunter Howard, Jr.
S. Hunter Howard, Jr., Chairman
s/A. Crawford Clarkson, Jr.
A. Crawford Clarkson, Jr., Commissioner
s/T. R. McConnell
T. R. McConnell, Commissioner
Columbia, South Carolina
, 1991
September 4

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