Are capital-fund-drive contributions that give donors priority to buy season tickets 'admission charges' subject to sales tax?

Plain-English summary

Syracuse University ran two capital fund drives and asked whether the contributions were taxable admission charges.

• Manley Plan (1977): $150 contributions (lump sum or three $50 installments) tied to a pledge to buy basketball season tickets. Contributors got priority to buy season tickets in a preferred seating section and a guaranteed same seat for three years — but had to buy the tickets at the same price as everyone else, with no refund if they didn't.
• Carrier Dome Plan (1978): contributions of $1,000/$500/$300/$150 to build a domed stadium; the amount determined which favorable seating area a contributor could then buy season tickets in, again at the same uniform ticket price, with a five-year seat guarantee.

The Department held neither contribution is a taxable admission charge.

• What the tax reaches. Section § 1105(f)(1) taxes any admission charge over ten cents to a place of amusement, and § 527.10(b)(1)(i) defines an admission charge as "the amount paid for admissions."
• These payments bought priority, not admission. The contributions did not entitle the donor to a seat; they merely gave the right to purchase a seat at the same price non-contributors paid. So they are not admission charges within the meaning of § 1105(f)(1).
• Carrier Dome, same result. The Carrier Dome contributions — which also fall within contributions to a charitable or educational institution — are not admission charges, on the same reasoning.

What this means for you

A donation that only unlocks the right to buy a ticket isn't an admission charge. If the contributor still has to purchase the ticket at the regular price, the gift bought priority or access to purchase — not entry — so it's outside the admissions tax. The taxable admission is the separately purchased ticket.

The structure is what saved it. Key facts: the contribution didn't include a seat, tickets cost the same for donors and non-donors, and there was no refund. Bundle a seat into the "contribution," or price donors' tickets differently, and the analysis could change.

Charitable/educational context reinforced the result. For the stadium drive, the Department also noted the payments were contributions to a charitable or educational institution — but the core reason was that the money bought priority, not admission.

Common questions

Q: Donors give to our seat-priority program. Is that a taxable admission charge?
A: Not if the donation only gives priority or the right to buy tickets at the regular price, and the donor still buys the ticket separately. The Department held such contributions aren't admission charges under § 1105(f)(1).

Q: What would make it taxable?
A: If the payment actually entitled the donor to a seat (i.e., it was the price of admission), it would be an admission charge. Here it didn't — donors bought their tickets at the same price as everyone else.

Q: Did the charitable/educational nature matter?
A: For the Carrier Dome Plan the Department noted the contributions were to a charitable or educational institution, but the decisive point was that the money bought priority to purchase, not admission itself.

Citations and references

Statute and regulation:

• Tax Law § 1105(f)(1) — tax on any admission charge over ten cents to a place of amusement
• Sales and Use Tax Regulations § 527.10(b)(1)(i) — admission charge defined as the amount paid for admissions

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1982.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a82_47s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-82(47)S
Sales Tax
December 22, 1982

Taxpayer Services Division
Technical Services Bureau
STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S820319A

On March 19, 1982 a Petition for Advisory Opinion was received from Syracuse University,
Office of the Comptroller, Skytop Offices, Syracuse, New York 13210.
The issue raised is whether certain payments made to Petitioner constitute admission charges
subject to sales tax imposed under Article 28 of the Tax Law.
I
Petitioner instituted a capital fund drive in 1977 (the "Manley Plan") to help pay for the
installation of new seats in the Manley Field House. Under the Manley Plan, contributions of $150
were to be made, payable either as a lump sum or in three annual installments of $50. Contributions
were made by completing a pledge card, furnished by Petitioner, and mailing it to Petitioner along
with the payment. The pledge card contained the following statement: "I want to be a part of the new
Manley Seating Plan. I agree to purchase Syracuse University Basketball season tickets for the next
three seasons and I will contribute $50.00 per seat annually for the next three seasons with options
thereafter." Contributors under the Manley Plan received priority in purchasing season tickets in a
distinct preferred seating section in the arena. In addition, a contributor was guaranteed the same seat
for three years if he purchased season tickets for each of those years.
The contributions did not entitle contributors to the use of a seat. Contributors had to
purchase season tickets at the same price paid by non-contributors. No refunds of the contributions
were made if a contributor did not purchase season tickets. It was provided that non-contributors
could purchase season tickets in the preferred seating section, but only if preferred seats were
available after contributors had exercised their prior right to purchase season tickets. Due to the
demand for season tickets by contributors, no non-contributors were able to purchase season tickets
in the preferred seating section. On infrequent occasions non-contributors purchased tickets in the
preferred seating section for individual games when a seat became available due to a contributor's
cancellation or some other reason.
Section 1105(f)(1) of the Tax Law imposes a sales tax on:
"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, . . . . "
Section 527.10(b)(1)(i) of the Sales and Use Tax Regulations defines the term admission
charge as "the amount paid for admissions . . . ."

ROBERT W. BOUCHARD, ACTING COMMISSIONER
GABRIEL B. DiCERBO , DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR
TP-8 (8/82)

-2­
TSB-A-82(47)S
Sales Tax
December 22, 1982

It is concluded that the $150 contributions do not constitute admission charges within the
meaning and intent of section 1105(f)(1) of the Tax Law. Such contributions do not entitle the
contributor to a seat, but merely grant him the right to purchase a seat at the same price applicable
to non-contributors.
II
In 1978 Petitioner instituted a capital fund drive (the "Carrier Dome Plan") to raise funds for
the construction of a domed stadium. Contributions were made, via pledge cards, in amounts of
$1,000, $500, $300 and $150. The pledge card indicated that the amount of the contribution
determined the location of the seats that could be purchased by a contributor on a season basis.
Contributions could be paid in a lump sum or in annual installments over three or five years.
Contributors received the exclusive right to purchase season tickets in designated areas of the new
stadium containing favorable seat locations. Contributors were guaranteed the same seat for five
years if they purchased season tickets for each of those years. It is to be noted that seats located other
than in such designated areas could be purchased on a season basis by non-contributors.
Contributors had to purchase season tickets at the same price paid by non-contributors in
order to obtain seats in the reserved sections. It is to be noted that all tickets for athletic events held
in the Carrier Dome are sold at a uniform price regardless of the location of the seat. Non­
contributors could purchase tickets for seats in the reserved sections on an individual game basis.
Such sales to non-contributors occurred with respect to most of the football games held in the new
stadium, as well as virtually all of the basketball games. As a general rule contributors did not
receive refunds of their contributions if they did not purchase season tickets.
It is concluded that contributions made under the Carrier Dome Plan, which fall within the
category of contributions to charitable or educational institutions, do not constitute admission
charges subject to tax under section 1105(f)(1) of the Tax Law, based on the same considerations
applicable in the case of the Manley Plan.

DATED: December 3, 1982

s/FRANK J. PUCCIA
Director
Technical Services Bureau