Is the admission fee to a children's indoor play center with climbing equipment subject to New York sales tax?

Plain-English summary

Tumbles Fresh Meadows Entertainment runs an indoor play center for children equipped with non-moving attractions like climbing apparatus, charging one admission fee for entry. It asked the Department whether that admission fee is subject to sales tax.

The Department said yes. New York taxes admission charges to any "place of amusement" -- broadly, any place where entertainment, amusement, or sports facilities are provided -- with a specific carve-out for admission to facilities for participatory sports where the patron is an active participant, like bowling alleys and swimming pools. The Department found Tumbles' play center fits the general "place of amusement" definition: it's a site where amusement facilities (the climbing apparatus and similar equipment) are provided, and the entrance fee grants unlimited use of those facilities. Citing its own recent Playspace 92nd Street West ruling on a similar children's play facility, the Department concluded a children's indoor play center isn't comparable to the type of participatory-sports facility, like a bowling alley, that the statute exempts, so the admission charge is taxable.

What this means for you

Children's play centers and indoor recreation businesses

An admission fee that lets customers use non-moving recreational or climbing equipment is generally a taxable "place of amusement" admission charge -- the participatory-sports exclusion is narrow and modeled on facilities like bowling alleys and swimming pools, not general children's play equipment.

Family entertainment center operators

Don't assume that because your facility is "participatory" (kids actively climbing, playing, etc.) it falls under the sports-facility exclusion. The Department and courts have repeatedly read that exclusion narrowly to apply to traditional participant sports facilities, not amusement or play equipment generally.

Accountants and tax professionals

This ruling closely tracks the Department's prior Playspace 92nd Street West opinion (TSB-A-97(61)S) on essentially the same fact pattern, and cites the same appellate authority (Fairland Amusements, Outdoor Amusement Business Assn.) defining "place of amusement" and "admission charge" broadly.

Common questions

Q: Is every admission fee to a recreational facility taxable in New York?
A: No. Admission charges to facilities for participatory sports in which the patron is a participant -- the statute specifically names bowling alleys and swimming pools -- are excluded from the admission-charge tax. Other "places of amusement," including most play centers, are taxable.

Q: Does it matter that the equipment is non-moving, not an amusement ride?
A: No. The tax applies to admission charges to a place of amusement generally, not just to rides -- a site with climbing apparatus or similar non-moving attractions still counts as a place of amusement.

Q: What if the admission fee also grants unlimited use of the facilities?
A: That doesn't change the analysis. A single admission charge covering unlimited use is still an admission charge under Tax Law § 1101(d)(2), fully taxable under § 1105(f)(1).

Q: Can another play center rely on this ruling?
A: No. It's an Advisory Opinion binding the Department only as to Tumbles Fresh Meadows Entertainment and the facility it described, though the reasoning tracks a consistent line of Department rulings on similar children's play facilities.

Citations and references

• Tax Law § 1101(d)(2) (admission charge definition)
• Tax Law § 1101(d)(10) (place of amusement definition)
• Tax Law § 1105(f)(1) (tax on admission charges)
• TSB-M-87(15)S (Taxable Status of Amusement Rides and Admission Charges, November 13, 1987)
• Playspace 92nd Street West, Inc., TSB-A-97(61)S (September 29, 1997)
• Fairland Amusements v. State Tax Commn., 110 AD2d 952, revd 66 NY2d 932
• Outdoor Amusement Business Assn. v. State Tax Commn., 84 AD2d 950, revd 57 NY2d 790

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1998.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a98_52s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-98(52)
Sales Tax
August 4, 1998

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO.S971231D

On December 31, 1997, the Department of Taxation and Finance received a
Petition for Advisory Opinion from Tumbles Fresh Meadows Entertainment, Inc.,
183-07 Horace Harding Expressway, Fresh Meadows, NY 11365-2243.
The issue raised by Petitioner, Tumbles Fresh Meadows Entertainment, Inc.,
is whether the fees charged for the admission to its play center are subject to
sales tax.
Petitioner is a corporation that maintains and operates a play center
equipped with non-moving attractions for recreation by children, e.g., climbing
apparatus. A single admission fee is charged to enter the play center.
Applicable Law and Regulations
Section 1105(f)of the Tax Law imposes tax on:
(1) 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 . . . except charges to a patron for admission to, or use
of, facilities for sporting activities in which such patron is to be
a participant, such as bowling alleys and swimming pools. . . .
Section 1101(d)(2) of the Tax Law defines admission charge as “[t]he amount
paid for admission, including any service charge and any charge for entertainment
or amusement or for the use of facilities therefor.”
Section 1101(d)(10) of the Tax Law defines place of amusement as “[a]ny
place where any facilities for entertainment, amusement, or sports are provided.”
Technical Services Bureau Memorandum, TSB-M-87(15)S, dated November 13,
1987, entitled Taxable Status of Amusement Rides and Admission Charges provides,
in part:
. . . While sales tax is not applicable to charges for the use of
amusement rides, charges for admission to an amusement park or
similar site where such rides are located remain subject to tax.
(Emphasis added)
Opinion
A place of amusement as defined in Section 1101(d)(10) of the Tax Law may
be interpreted as meaning the physical space within which the amusement is
provided. This definition is descriptive of Petitioner’s play center, i.e., a
site where facilities for amusement or entertainment are provided (cf. Fairland
Amusements v. State Tax Commn., 110 AD2d 952, 954 (Mikoll, J., dissenting), revd
66 NY2d 932.)

-2­
TSB-A-98(52)
Sales Tax
August 4, 1998

The sales tax is imposed on the admission charge to or for the use of any
place of amusement.
The fee charged to enter a location where amusement
facilities are found or for the use of the facilities is an admission charge as
defined in Section 1101(d)(2) of the Tax Law (cf. Outdoor Amusement Business
Assn. v. State Tax Commn., 84 AD2d 950, revd on dissenting mem below 57 NY2d
790). Petitioner’s entrance fee for the admission to its place of amusement,
which entitles the customer to enter the center and enjoy unlimited use of
various amusement devices, is an admission charge within the meaning of Section
1101(d)(2) of the Tax Law.
Accordingly, the receipts from such charges are
subject to tax under Section 1105(f)(1) of the Tax Law (Playspace 92nd Street
West, Inc., Adv Op Comm T&F, September 29, 1997, TSB-A-97(61)S).
It should be noted that Petitioner’s play center is not comparable to the
type of facility for participatory sports contemplated by the statute for which
admission charges are excluded from tax (Playspace 92nd Street West, Inc.,
supra).

DATED: August 4, 1998

NOTE:

/s/
John W. Bartlett
Deputy Director
Technical Services Bureau
The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.