Does an amusement park with no gate fee have to charge sales tax on the tickets customers buy to go on individual rides?

Plain-English summary

Hoffman's Playland Inc. operates an amusement park with rides such as a ferris wheel and merry-go-round. There is no charge to enter the park; instead, each ride requires buying a set number of tickets. It asked whether those ride tickets are subject to sales tax under Tax Law § 1105(f)(1).

The Department held the ride tickets are not taxable.

• The amusement tax. Section 1105(f)(1) taxes an admission charge (over ten cents) to or for the use of a place of amusement. A "place of amusement" (§ 1101(d)(10)) is any place providing facilities for entertainment, amusement, or sports, and an "admission charge" (§ 1101(d)(2)) is the amount paid for admission, including for the use of facilities.
• The Fairland two-part test. Under Fairland Amusements, Inc. v. State Tax Commission: (1) the money must be an admission charge — a fee for entrance to a place or for the use of facilities; and (2) the tax reaches only the admission charge to or for the use of the place of amusement, meaning the physical space or facility.
• Entering the place is taxable; using a ride is not. The courts drew the line: a charge to enter a location where rides are found is taxable, but a charge to use a ride is not taxable — regardless of whether there is also a charge to enter the location.
• Result. Because Hoffman's ticket sales are for the use of the rides, not a fee to enter the park, no tax may be imposed under § 1105(f)(1).

What this means for you

In New York, the amusement tax falls on getting in the gate, not on the rides. A charge to enter an amusement location is a taxable admission; a charge to ride a specific attraction is not. If your park is free to enter and you sell per-ride tickets, those ride tickets are not taxable under § 1105(f)(1).

Structure matters — watch a combined gate-and-ride ticket. The exempt treatment here rests on the tickets being for ride use, not park entry. A single charge that functions as admission to the grounds could be taxable, so how you price and describe entry versus rides can affect the result.

This is about the amusement admission tax specifically. It doesn't decide other taxes that might apply to other things you sell (food, merchandise, etc.), which have their own rules.

Common questions

Q: We charge per ride but nothing to enter. Are the ride tickets taxable?
A: No. A charge to use a ride is not a taxable admission to a place of amusement under § 1105(f)(1).

Q: What if we did charge admission at the gate?
A: A charge to enter the location where rides are found is a taxable admission — even if you also sell separate ride tickets (which remain non-taxable as ride-use charges).

Q: Where does this rule come from?
A: The Fairland Amusements two-part test: the payment must be an admission charge, and the tax reaches only admission to or use of the place of amusement (the physical space), not the use of an individual ride.

Citations and references

Statute and case:

• Tax Law § 1105(f)(1) — taxes admission charges (over ten cents) to or for the use of a place of amusement
• Tax Law § 1101(d)(10) — defines a place of amusement (facilities for entertainment, amusement, or sports)
• Tax Law § 1101(d)(2) — defines an admission charge
• Fairland Amusements, Inc. v. State Tax Commission, 66 N.Y.2d 932 (1985) (and Outdoor Amusement Business Assn. v. State Tax Comm., 57 N.Y.2d 790) — a charge to enter is taxable, a charge to use a ride is not

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1987.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a87_36s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-87(36)S
Sales Tax
September 25, 1987

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S870622A

On June 22, 1987, a Petition for Advisory Opinion was received from Hoffman's Playland
Inc., P.O. Box 652, E. Newton Road, Newtonville, New York 12128.
The issue raised by Petitioner is whether the purchase of tickets to use an amusement ride
is subject to sales tax under section 1105(f)(1) of the Tax Law.
Petitioner is a corporation that operates and maintains an amusement park area in which rides
such as a ferris wheel, merry-go-round, etc, are available. There is no admission charge to enter the
park area. Each ride requires the purchase of a specified number of tickets.
Section 1105(f)(1) of Article 28 of the Tax Law imposes a tax on "[a]ny 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 ....
A place of amusement is defined in the statute as "[a]ny place where any facilities for
entertainment, amusement, or sports are provided." (Tax Law §1101, subd. [d], par. [10]). An
admission charge is "[t]he amount paid for admission, including any service charge and any charge
for entertainment or amusement or for the use of facilities therefore." (Tax Law §1101, subd. [dl, per.
[2]).
Recent court decisions have developed a two-part test to determine whether sales tax is due
on tickets sold to the public for amusement rides (see Fairland Amusements, Inc. v. State Tax
Comm. 66 N.Y.2d 932, 498 N.Y.S.2d 796 (1985), revg. on dissenting opinion below 110 A.D. 2d
952, 487 N.Y.S. 2d 879). First, the money paid must be an admission charge, either a fee paid for
entrance to a place or for the use of facilities. (Ibid, citing Outdoor Amusement Business Assn. v.
State Tax Comm., 57 N.Y.2d 790, 455 N.Y.S. 2d 586, revg. on dissenting mem. below 84 A.D. 2d
950, 952, 447 N.Y.S. 2d 69). Second, the sales tax is imposed only on the admission charge to or for
the use of any place of amusement. A place of amusement may be interpreted as meaning only the
physical space within which the amusement is provided or the amusement facility itself. It has been
determined that an admission charge to enter a location where amusement rides are found is subject
to tax while an admission charge to use a ride is not subject to tax regardless of whether there is a
charge for entering the location where amusement rides are found. Fairland Amusements, supra.

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

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

-2­
TSB-A-87(36)S
Sales Tax
September 25, 1987

Accordingly, the statute and applicable definitions must be construed to apply a tax only on
the admission charge to enter a location where the amusement facilities are found.
Inasmuch as Petitioner's sale of tickets is for the use of the rides and not a fee for admission
to the park itself a tax may not be imposed under section 1105(f)(1) of the Tax Law.

DATED: September 25, 1987

s/FRANK J. PUCCIA
Director
Technical Services Bureau

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