Which charges by an indoor rock-climbing gym — memberships, passes, classes, guided climbs, and birthday parties — are subject to Georgia sales tax?

Plain-English summary

An indoor rock-climbing facility sells a range of things: daily climbing passes, guided indoor climbing, climbing classes, memberships, guided outdoor climbing, birthday party packages, and private event packages, plus optional party add-ons. It had been collecting sales tax on memberships and party add-ons, but not on guided outdoor climbing, birthday party packages, or classes. It asked the Department to sort out which charges are taxable.

The core rule: Georgia's definition of a taxable "retail sale" includes charges for admission to places of amusement, sports, or entertainment, and charges for participation in games and amusement activities. Measured against that, the Department found:

• Memberships, daily passes, birthday party packages, climbing classes, and guided outdoor climbing are all taxable — they are charges for admission to a place of amusement or for participating in amusement activities.
• Birthday party add-ons (goodie bags, party favors, food, beverages) are taxable sales of tangible personal property.
• Items included in a party package at no separate charge are treated as used and consumed by the gym in providing the amusement — so the gym pays tax when it buys those items, rather than collecting tax on them separately.

The practical message is that nearly everything the facility charges customers is taxable, either as an amusement/admission charge or as a sale of goods — including the guided climbs, classes, and party packages it had not been taxing.

What this means for you

Gyms, climbing walls, and recreation venues

Charges to get in or to participate — memberships, day passes, classes, guided sessions, and party packages — are taxable amusement charges in Georgia, not exempt services. If you sell separate goods (party favors, food, retail items), those are taxable as tangible personal property. Assume the whole customer-facing menu is taxable unless a specific exemption says otherwise.

Event and party operators

A bundled party package sold for one price is taxable as an amusement charge; the incidentals folded into that package at no extra charge are things you consume to deliver the event (you pay tax on buying them). Add-ons a customer separately buys are taxable retail sales. Keep the bundled-vs-separately-sold distinction clean on your invoices.

Accountants and tax professionals

The hook is O.C.G.A. § 48-8-2(31)(C)-(D), which pulls admission and participation charges into "retail sale." Amusement operators generally owe tax on their own purchases of tangible personal property used to provide the activity (Ga. Comp. R. & Regs. r. 560-12-1-.14(7)); separately sold merchandise is collected on as a retail sale. Watch for a client under-collecting on classes or guided sessions that it treats as untaxed "services."

Common questions

Q: Are gym memberships and day passes taxable in Georgia?
A: Yes. As charges for admission to a place of amusement or for participating in amusement activities, memberships and daily passes are subject to sales tax.

Q: Are climbing classes and guided climbs taxable?
A: Yes. The Department treated climbing classes and guided outdoor climbing as amusement/participation charges, which are taxable — even though the facility had not been collecting tax on them.

Q: How are birthday party packages and add-ons taxed?
A: The party package itself is a taxable amusement charge. Separately purchased add-ons — goodie bags, favors, food, beverages — are taxable sales of tangible personal property.

Q: What about items included in the package at no extra charge?
A: Those are considered used and consumed by the facility in providing the amusement, so the facility pays tax when it purchases them rather than collecting tax on them from the customer.

Q: Can another recreation business rely on this ruling?
A: No. It is binding on the Department only for the taxpayer and facts presented, and no other taxpayer may rely on it.

Citations and references

Statutes and rules:

• O.C.G.A. §§ 48-8-1, 48-8-2(31)(A), 48-8-30(a) (imposition of sales and use tax)
• O.C.G.A. § 48-8-2(31)(C), (D) (retail sale includes admissions to amusement and participation in games/amusement activities)
• O.C.G.A. § 48-8-2(31), (33)(A) (definitions of retail sale and sale)
• Ga. Comp. R. & Regs. r. 560-12-1-.14(7) (dealer owes tax on tangible personal property used to provide amusement activities)

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2015-18

Original ruling text

Date Issued: December 1, 2015
Georgia Letter Ruling: LR SUT-2015-18
Topic: Admissions/Retail Sales
This letter is in response to your request for guidance on the application of Georgia sales and use tax to Taxpayer’s
charges for memberships and other related transactions.
Facts
Taxpayer operates an indoor rock climbing facility in Georgia. Taxpayer sells, among other things, the following:
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Daily climbing passes (additional charge for gear rental).
Guided indoor climbing passes (includes harness rental).
Climbing classes (some classes include gear rental).
Memberships (includes gear rental).
Guided outdoor climbing (includes gear rental, food, and beverage).
Birthday party packages (includes harness rentals, food, and certain other items). The customer may also
purchase party add-ons, such as additional food.
Private event packages.

Taxpayer has been collecting sales tax on charges for memberships and party add-ons but has not been collecting tax
on charges for guided outdoor climbing, birthday party packages, or classes.
Issues
Are the following sales by Taxpayer subject to Georgia sales and use tax?:
1.
2.
3.
4.
5.
6.

Memberships.
Birthday party packages.
Birthday party add-ons.
Items included with birthday party package.
Classes.
Guided outdoor climbing.

Analysis
Georgia levies and imposes a tax (subject to certain specific exemptions) on the retail purchase, retail sale, rental,
storage, use, or consumption of tangible personal property and certain enumerated services. 1 “Retail sale” means a
sale for any purpose other than for resale.2 “Sale” means any transfer of title and/or possession, lease, or rental,
conditional or otherwise, in any manner, or by any means of any kind of tangible personal property for a
consideration.3
“Retail sale” includes “sales of tickets, fees, or charges made for admission to, or voluntary contributions made to
places of, amusement, sports, or entertainment” and “charges made for participation in games and amusements
activities.”4 Accordingly, charges for membership at or admission to a facility offering amusement, sports, or
entertainment or participation in games or amusements are taxable. Generally, dealers making charges for admission
to places of amusement or for participation in amusement activities owe tax on their purchases of tangible personal
property used to provide the amusement events or activities.5
1

O.C.G.A. §§ 48-8-1, -2(31)(A), -30(a).
O.C.G.A. § 48-8-2(31).
3
O.C.G.A. § 48-8-2(33)(A).
4
O.C.G.A. § 48-8-2(31)(C), (D).
5
Ga. Comp. R. & Regs. 560-12-1-.14(7).
2

Date Issued: December 1, 2015
Georgia Letter Ruling: LR SUT-2015-18
Topic: Admissions/Retail Sales
Page 2 of 2

The Department considers charges for the memberships, birthday party packages, climbing classes, and guided
outdoor climbing to be charges for admission to places of amusement or charges made for participation in
amusement activities. Items included with birthday party packages are considered to be used and consumed by
Taxpayer in providing the amusement events and activities. Sales of birthday party add-on items, including goodie
bags, party favors, food, and beverage, are sales of tangible personal property subject to sales tax.
Rulings
1.
2.
3.
4.
5.
6.

Sales of memberships and daily passes are subject to sales tax.
Birthday party packages are subject to sales tax.
Birthday party add-ons are sales of tangible personal property subject to sales tax.
Birthday party incidental items included at no additional charge with the birthday party package are
considered to be used and consumed by Taxpayer in providing the amusement events and activities.
Sales of climbing classes are subject to sales tax.
Sales of guided outdoor climbing are subject to sales tax.

The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances, and taxpayer in question. Should the circumstances regarding the
transactions change or differ materially from those represented, this ruling may become invalid. Subsequent
statutory or administrative rule changes or judicial interpretations of the statutes or rules upon which this ruling is
based may subject similar future transactions to different tax treatment than expressed in this ruling.