Is the single admission-and-equipment charge to play a paintball 'survival game' taxable, and what about a free t-shirt given to the winner?

Plain-English summary

Survival Games of the Great Northeast, Inc. (through its president, Scott B. Smith) runs a paintball "survival game" — teams in a shooting match with CO2-fired paint weapons. It charges each participant a single fee for admission and equipment rental, with no other charges, and gives the winner of each game a free t-shirt. It asked whether the admission charge is taxable. This opinion mirrors the companion ruling TSB-A-85(47)S and adds the t-shirt point.

The Department's answer, in parts:

• The admission to play is not taxable. New York taxes amusement admissions but excepts charges for admission to (or use of) facilities for sporting activities in which the patron is a participant (Tax Law 1105(f)(1)). Playing the game qualifies — analogous to the regulation's bowling-lane and ski-lift examples (20 NYCRR 527.10) — so the admission is exempt.
• Equipment furnished with the admission is not a sale — the operator pays tax on its purchases. Providing the pistol, holster, goggles, paint, and CO2 as part of the single admission is like a bowling alley furnishing house balls: the price is the same whether or not a player uses the gear, so the operator is not selling tangible personal property (20 NYCRR 527.10(b)(1)(i)) and must pay sales tax when it buys the equipment.
• The free winner's t-shirt: no tax to the player, but tax on the operator's purchase. Because the t-shirt is given away without charge, there is no sales tax on that transfer. But the operator (the giver) must pay sales tax on its own purchase of the t-shirts (20 NYCRR 526.6(c)(4)).

Amusement charges are presumed taxable until the contrary is shown, so the operator carries the burden of proving the admission is exempt (Tax Law 1132(c)).

What this means for you

Participant-sport admissions are exempt. If customers are playing rather than watching, the admission is generally outside the amusement tax, like bowling or lift tickets.

Gear bundled into one admission price makes you the consumer of that gear. You pay tax when you buy equipment you furnish as part of admission; you don't tax the player, and you shouldn't buy that gear for resale.

Free promotional giveaways are taxed to you, the giver. Handing a prize (or any promotional item) to a customer for free isn't a taxable sale to them — but you owe tax on your purchase of the item you give away. Don't use a resale certificate for goods you plan to give away.

Common questions

Q: Do I charge tax on the fee to play?
A: No — the admission to a participant sporting activity is exempt (1105(f)(1)), though you bear the burden of proving it qualifies (1132(c)).

Q: What about the paint gun, goggles, and paint that come with the game?
A: Furnished as part of admission, not sold. You don't tax the player; you pay tax on your own purchase of the equipment.

Q: We give the winner a free t-shirt. Is that taxable?
A: Not to the winner — it's given without charge. But you owe sales tax on your purchase of the t-shirts (20 NYCRR 526.6(c)(4)).

Citations and references

Tax Law:

• 1105(a) — imposes sales tax on retail sales of tangible personal property
• 1105(f)(1) — taxes amusement admissions but excepts admission to/use of facilities for sporting activities in which the patron participates
• 1132(c) — amusement charges are presumed taxable; the burden of proving otherwise is on the collector

Regulation:

• 20 NYCRR 527.10 — amusement and participant-sporting admissions; bowling-lane and ski-lift examples
• 20 NYCRR 527.10(b)(1)(i) — equipment furnished as part of an admission is not a sale; the operator is the consumer
• 20 NYCRR 526.6(c)(4) — property given away without charge is a taxable use by the giver, who owes tax on its purchase

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1985.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a85_46s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-85(46)S
Sales Tax
October 16, 1985

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S850212A

On February 12, 1985 a Petition for Advisory Opinion was received from Scott B. Smith,
President of Survival Games of the Great Northeast, Inc., 56 South Union Street, Cambridge, New
York 12816.
The issue raised is whether the charge for admission to play what is known as a "survival
game" is subject to sales tax.
Survival games are generally played on a playing field with two or more parties engaged in
a shooting match using CO2 fired weapons that shoot paint. While not so stated in the Petition, it
is presumed that this is the type of survival game which is the subject of Petitioner's inquiry.
Petitioner states that a single charge is imposed on the participant for admission and rental
of equipment and there are no other additional charges. The winner of each game receives a free
"Survival Games of the Great Northeast, Inc." t-shirt.
Section 1105(a) of the Tax Law imposes a sales tax on the receipts from every retail sale of
tangible personal property, except as otherwise excluded or exempted.
Section 1101(b)(5) of the Tax Law defines "sales" as any transfer of title or possession or
both, exchange or barter, rental, lease or license to use or consume, conditional or otherwise in any
manner or by any means whatsoever for a consideration.
Section 1105(f)(1) of the Tax Law imposes a sales tax on any admission charge to or for the
use of any place of amusement in the state except charges to a patron for admission to, or use of,
facilities for sporting activities in which such patron is to be a participant.
Section 1132(c) of the Tax Law provides that all amusement charges of any type mentioned
in section 1105(f) are subject to tax until the contrary is established and that the burden of proving
that any amusement charge is not taxable is on the person required to collect tax.
Regulation section 527.10(c)(4) illustrates the applicability of section 1105(f)(1) of the Tax
Law with the following examples:
Example 6: Admission charges for the use of bowling lanes and swimming pools are
not subject to tax. However, any charge for the use of tangible personal property in
conjunction with the sporting activity is taxable. Included as taxable would be
bowling shoes, towel and locker rentals.

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

-2­
TSB-A-85(46)S
Sales Tax
October 16, 1985

Example 7: A ski resort's charge for lift tickets is an exempt admission charge to a
sporting facility in which the patron will be a participant. If the facility charges for
the use of skis or other equipment, such charge is for the rental of tangible personal
property which is subject to tax. (20 NYCRR 527.10).
Accordingly, the admission charge for participating in the survival game is not subject to tax
since the patron is a participant.
Petitioner's provision of equipment (pistol, holster, goggles, paint and CO2) necessary to play
the game is analogous to bowling alleys' providing bowling balls and miniature golf courses'
providing putters and golf balls. In each of these cases the charge to the patron is the same whether
or not the participant uses the equipment (e.g. a bowler using his own ball instead of a house ball).
The use of the equipment is part of the admission. In providing equipment in this manner, Petitioner
is not selling tangible personal property within the meaning of section 1105(a) of the Tax Law. (20
NYCRR 527.10(b)(1)(i)). Accordingly, Petitioner is required to pay sales tax on such purchases.
Where Petitioner charges a fee (in a transaction separate and distinct from the admission) for
the use of additional paint or CO2 cartridges, such a transaction constitutes a taxable sale of tangible
personal property pursuant to section 1105(a) of the Tax Law. Accordingly, Petitioner may purchase
such paint and CO2 cartridges without tax by giving its supplier a properly completed resale
certificate (Form ST-120). (20 NYCRR 532.4(d)). In the event Petitioner purchases paint or CO2
cartridges using a resale certificate, Petitioner must maintain records adequate to verify the sales and
use tax status of such purchases. (20 NYCRR 533.2). Paint and CO2 cartridges purchased tax
exempt with a resale certificate and which is supplied to the patron as part of the admission, must
be reported as a purchase subject to use tax. (20 NYCRR 532.4(d)(3)).
Inasmuch as the t-shirts are given to the winning participant without charge there is no sales
tax due on such transfer. The person giving away the t-shirt (viz. Survival Games of the Great
Northeast Inc.) would, however, be required to pay sales tax on its purchase of the t-shirts. (20
NYCRR 526.6(c)(4)).

DATED: September 18, 1985

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth herein.