If a business charges customers to play a no-stakes black jack table (chips have no monetary value, dealt by a live dealer), does it owe Texas sales tax on the charge?

Plain-English summary

A business asked whether it needs to collect Texas sales tax for charging customers to play black jack at a table where the chips have no monetary value, the game is purely for entertainment, and a live person deals the cards (not a video game). The Comptroller answered that the charge is taxable -- the business must obtain a sales tax permit and collect tax on the total amount charged to play any card game, including black jack. The reasoning: selling an amusement service is taxable in Texas, and that category includes participatory games (games customers actively play, not just watch), with domino games specifically listed as an example in Rule 3.298(a)(1)(D)(iv), Amusement Services. The letter is careful to note the Comptroller isn't weighing in on whether the gambling equipment itself is legal or regulated in Texas -- only on the sales tax treatment of the charge to play.

What this means for you

Businesses running card tables, game rooms, or similar participatory entertainment

Charging a fee to play a card game -- even a no-stakes, for-fun table -- is a taxable amusement service. Get a sales tax permit and collect tax on the full charge to play, the same as you would for other participatory games like dominoes.

Accountants and tax professionals

This letter is a clean, general reference point for "amusement services include participatory card/table games" under Rule 3.298(a)(1)(D)(iv) -- useful whenever a client asks about a fee-based table, arcade, or game-room offering that customers actively play rather than merely watch.

Common questions

Q: Is charging customers to play a no-stakes black jack table taxable in Texas?
A: Yes, per this letter -- it's a taxable amusement service.

Q: Does it matter that the chips have no monetary value and it's purely for fun?
A: No, per this letter -- the charge to play is still taxable regardless.

Q: Does this letter address whether the gambling equipment itself is legal in Texas?
A: No, per this letter -- the Comptroller expressly says it can't advise on the legality/regulation of gambling equipment, only on sales tax.

Citations and references

Statutes and rules:

• 34 Tex. Admin. Code Rule 3.298(a)(1)(D)(iv) (amusement services; participatory games)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9705388L

Original ruling text

May 5, 1997

Dear ***:

Thank you for your letter concerning whether you need to collect sales tax if
you are charging people to play black jack.

You stated you have a business with a black jack table, the table is purely for
fun, and there is no monetary value in the chips. This is not a video game and
there is a real person behind the table dealing the cards.

We are unable to advise you regarding the legality and/or regulation of
gambling equipment in Texas. However, we can tell you whether your service is
subject to sales tax. You must get a sales tax permit and collect sales tax on
the total charge to the customer to play any card game including black jack.
The sale of an amusement service is taxable. This includes participatory
games. For instance, domino games are listed in the examples of amusement
services in subsection (a)(1)(D)(iv) of Rule 3.298, Amusement Services. A copy
of that rule is enclosed.

This opinion is based on the facts you submitted. Other facts, though similar,
may yield different results.

You may call me toll free at 1-800-531-5441, ext. 5-0030. The direct line is
512/475-0030. You may also write to Tax Policy, Comptroller of Public
Accounts.

Sincerely,

David Somerville
Tax Policy Division

Enclosure