Are golf, tennis, and similar tournament entry fees subject to South Carolina admissions tax?

Plain-English summary

The South Carolina Department of Revenue ruled that a tournament participation component was not itself subject to admissions tax. The portion of the fee representing the normal and customary charge to use a golf course, tennis court, driving range, or other place of amusement was taxable unless an exemption applied.

Who collected and remitted the tax depended on the arrangement. The facility operator was responsible when it conducted the tournament or charged the outside organizer for participants' facility use. An outside organizer was responsible when it received use of the facility without charge or rented the whole facility, unless a written agreement turned the tax over to the operator and the operator maintained the required records.

If the facility-use allocation was unreasonable or unsupported, the Department could apply admissions tax to the entire entry fee.

What this means for you

Tournament organizers

Separate and document the participation, awards, food, administration, and normal facility-use components. A credible books-and-records allocation protects the nontaxable participation portion.

Golf courses and tennis facilities

The normal green fee, court fee, or range fee remained a charge for using a place of amusement even when wrapped into a larger tournament package.

Nonprofit organizations

Nonprofit sponsorship did not automatically exempt facility-use charges. The member-use exemption described in the ruling applied only when the qualifying nonprofit club operating the facility conducted the tournament.

Common questions

Q: Is the entire tournament entry fee taxable?
A: Not automatically. The participation portion was not taxed, but the normal facility-use portion was.

Q: Who remits the tax when the facility bills an outside organizer per participant?
A: The facility operator, because it collected the taxable use charge.

Q: What if the organizer gets the facility free or rents the whole property?
A: The organizer generally had to be licensed and remit tax on the facility-use portion, subject to the ruling's written-agreement option.

Q: What if records do not support the allocation?
A: The Department could tax the entire entry fee.

Citations and references

• S.C. Code §§ 12-21-2410 and 12-21-2420 (admission means the right to enter or use a place of amusement)
• S.C. Code § 12-21-2440 (license for operating a taxable place of amusement)
• Beach v. Livingston, 248 S.C. 135, 149 S.E.2d 328 (1966) (tax applies to paid use even without an entrance charge)
• SC Revenue Ruling 05-14 (tournament participation and facility-use distinction referenced by this ruling)

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR09-12.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214

SC REVENUE RULING # 09-12

SUBJECT:

Tournament Participation Entry Fees
(Admissions Tax)

EFFECTIVE DATE: Applies to all periods open under the statute.
SUPERSEDES:

All previous documents and any oral directives in conflict herewith.

REFERENCES:

S. C. Code Ann. Section 12-21-2410 (2000)
S. C. Code Ann. Section 12-21-2420 (2000; Supp. 2008)
S. C. Code Ann. Section 12-21-2440 (2000)
S. C. Code Ann. Section 12-21-4010 (2000)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2000)
S. C. Code Ann. Section 1-23-10(4) (Supp. 2008)
SC Revenue Procedure #09-3

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the
public and to Department personnel. It is an advisory opinion issued
to apply principles of tax law to a set of facts or general category of
taxpayers. It is the Department’s position until superseded or
modified by a change in statute, regulation, court decision, or
another Departmental advisory opinion.

Question:
Are tournament participation entry fees, or any portion of such fees, subject to the State
admissions tax?
Conclusion:
It is the opinion of the Department that tournament participation entry fees are not subject
to the admissions tax. However, charges for use of the place of amusement as a result of a
tournament are subject to the admissions tax, unless otherwise exempt under Code Section
12-21-2420, as follows:
(1) If the tournament is conducted by the operator of the place of amusement (e.g.,
member-guest golf tournament), then the portion of each tournament participation
entry fee that represents the normal and customary charge to utilize the place of

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amusement (e.g., the green fee, court fee, driving range fee) is subject to the
admissions tax and the place of amusement is responsible for remitting the tax to
the Department.
(2) If the tournament is conducted by someone other than the operator of the place
of amusement (e.g., a business or nonprofit organization), then the amount paid to
the operator of the place of amusement by the person conducting the tournament
for each participant’s use of the place of amusement (e.g., green fee, court fee,
driving range fee) is subject to the admissions tax and the place of amusement is
responsible for remitting the tax to the Department.
(3) If the tournament is conducted by someone other than the operator of the place
of amusement and the operator of the place of amusement is not charging such
person for use of the place of amusement (e.g., the course’s golf pro, a nonprofit
organization), then the portion of the tournament participation entry fee that
represents the normal and customary charge to utilize the place of amusement (e.g.,
the green fee, court fee, driving range fee) is subject to the admissions tax and the
person conducting the tournament must be licensed and is responsible for remitting
the tax to the Department.
However, if the operator of the place of amusement and the person conducting the
tournament agree in writing that the applicable admissions tax will be turned over
to the operator of the place of amusement, then the operator will also be held
accountable to the State for such taxes and must maintain proper records with
respect to the tournament, as such monies are being held in trust for and as a debt to
the State.
(4) If the tournament is conducted by someone other than the operator of the place
of amusement and that person rents the entire facility (clubhouse, parking area,
course, courts, restaurants, etc.) from the operator of the place of amusement, then
the portion of the tournament participation entry fee that represents the normal and
customary charge to utilize the place of amusement (e.g., the green fee, court fee,
driving range fee) is subject to the admissions tax and the person conducting the
tournament must be licensed and is responsible for remitting the tax to the
Department.
However, if the operator of the place of amusement and the person conducting the
tournament agree in writing that the applicable admissions tax will be turned over
to the operator of the place of amusement, then the operator will also be held
accountable to the State for such taxes and must maintain proper records with
respect to the tournament, as such monies are being held in trust for and as a debt to
the State.
Note #1: If the normal and customary charge to utilize the place of amusement (e.g., the
green fee, court fee, driving range fee) is more than the tournament participation entry fee,
then the person conducting the tournament must remit the admissions tax on a portion of

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the tournament participation entry fee that reasonably represents the charge to utilize the
place of amusement. If the charge to utilize the place of amusement is not reasonable or is
not supported by the books and records of the person conducting the tournament, then the
admissions tax will apply to the entire tournament participation entry fee.
Note #2: With respect to Conclusions #2, #3 and #4 above, the exemption in Code Section
12-21-2420(4) for charges to members of certain nonprofit clubs for use of the facilities of
the nonprofit club of which they are a member is not applicable since the tournaments in
these conclusions are not being conducted by the nonprofit club that operates the place of
amusement. This exemption for charges to members would only apply to tournaments
conducted by such nonprofit clubs.
Note #3: See Code Section 12-21-2420 for a list of exemptions from the admissions tax
that, depending on the facts and circumstances, may apply.
Facts:
Many golf courses and tennis facilities conduct or allow tournaments at their facilities for
both members and non-members. Persons participating in these tournaments pay an entry
fee that typically covers green fees or court fees, awards, administrative costs of the
tournament and food. In addition to tournaments conducted by the operator of the golf
course or tennis facility, tournaments may also be conducted by businesses and nonprofit
organizations.
The issue has been raised as to the application of the state admissions tax to these
tournaments and tournament entry fees.
Discussion:
Code Section 12-21-2420 imposes the admissions tax and states in part:
There must be levied, assessed, collected, and paid upon paid admissions to
places of amusement within this State a license tax of five percent. The
license tax may be listed separately from the cost of admission on an
admission ticket. …1

The tax imposed by this section must be paid by the person or persons
paying the admission price and must be collected and remitted to the South
Carolina Department of Revenue by the person or persons collecting the
admission price. … (Emphasis added.)

1

Code Section 12-21-2420 also provides for various exemptions from the admissions.

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Code Section 12-21-2410 defines the terms “admissions,” “place,” and “person” and
states:
For the purpose of this article and unless otherwise required by the context:
(1) The word “admission” means the right or privilege to enter into or use a
place or location;
(2) The word “place” means any definite enclosure or location; and
(3) The word “person” means individual, partnership, corporation,
association, or organization of any kind whatsoever.
In summary, the admissions tax is imposed upon the paid right or privilege to enter into or
use a place of amusement.2
Furthermore, Code Section 12-21-3010 reads, in part:
The taxes and penalties imposed by this chapter shall be deemed a debt
owing to the State by the person against whom they shall be charged ...
(Emphasis added).
The word “charged” is not defined in the statute; however, it is an accepted practice in
South Carolina to resort to the dictionary to determine the literal meaning of words used in
statutes. For cases where this has been done, see Hay v. South Carolina Tax Commission,
273 SC 269, 255 S.E.2d 837 (1979); Fennell v. South Carolina Tax Commission, 233 S.C.
43, 103 S.E.2d 424 (1958); Etiwan Fertilizer Co. v. South Carolina Tax Commission, 217
SC 484, 60 S.E.2d 682 (1950). The Second College Edition of the American Heritage
Dictionary defines "charge" as: “To entrust with a duty, responsibility or obligation ...”
In summary, the admissions tax is paid by the person paying for the right or privilege to
enter or use a place of amusement. However, the person or persons collecting the
admissions charge have an obligation, or a duty, to collect and remit the tax and, therefore,
have a debt to the State for the taxes required to be collected.
With respect to tournament participation entry fees, SC Revenue Ruling #05-14 states:
It should be noted that it has been the longstanding position of the
Department that (1) fees for golf, tennis, dancing, and self-defense lessons
from an instructor; (2) tournament participant entry fees (exclusive of the
normal and customary charges to utilize the place of amusement, i.e. green
2

It is important to note that the statute taxes charges to "use" a place of amusement, as well as charges to
enter a place of amusement. This is seen in Beach v. Livingston, 248 SC 135, 149 SE2d 328 (1966), where
the South Carolina Supreme Court held that the admissions tax applied to charges paid for the "use" of a
bowling alley even though no charge was required for a person to “enter” the bowling alley. In addition, for
examples of “places of amusements” that are subject to the admissions tax, see SC Revenue Ruling #05-14.

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or court fees); (3) fees for boat, carriage, helicopter, plane or bus rides for
touring, charter, fishing, or excursion (see SC Technical Advice
Memorandum #95-2.); (4) golf cart fees (subject to sales tax as rentals); (5)
“trail fees” (fees charged by golf courses for someone using their own golf
cart); (6) boat or jet ski rental fees (subject to sales tax); (7) fees for using
tanning beds; (9) initiation fees for country clubs, golf clubs, tennis clubs
and similar facilities3 provided the initiation fee is a one-time
(nonrecurring) charge paid as a prerequisite to joining the club; and (10)
fees for equestrian lessons are not fees to enter or use a place of amusement
and are not subject to the admissions tax. (Emphasis added.)
Furthermore, Code Section 12-21-2440 reads, in part:
Before engaging in business every person operating a place of amusement
within the State subject to the tax imposed by this article shall file with the
Commission an application for a permanent license permitting him to
engage in the business.
In summary, any person operating a place of amusement, whether as the owner or lessee of
such place, must obtain an admissions tax license.
Based on the above and longstanding policy, it is the opinion of the Department that
tournament participation entry fees are not subject to the admissions tax. However, charges
for use of the place of amusement as a result of a tournament are subject to the admissions
tax, unless otherwise exempt under Code Section 12-21-2420, as follows:
(1) If the tournament is conducted by the operator of the place of amusement (e.g.,
member-guest golf tournament), then the portion of each tournament participation
entry fee that represents the normal and customary charge to utilize the place of
amusement (e.g., the green fee, court fee, driving range fee) is subject to the
admissions tax and the place of amusement is responsible for remitting the tax to
the Department.
(2) If the tournament is conducted by someone other than the operator of the place
of amusement (e.g., a business or nonprofit organization), then the amount paid to
the operator of the place of amusement by the person conducting the tournament
for each participant’s use of the place of amusement (e.g., the green fee, court fee,
driving range fee) is subject to the admissions tax and the place of amusement is
responsible for remitting the tax to the Department.

3

An initiation fee should not allow a person to utilize the facilities of the club without payment of a recurring
charge (membership dues). In other words, a one-time charge that is a substitute for recurring membership
dues is not an initiation fee.

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(3) If the tournament is conducted by someone other than the operator of the place
of amusement and the operator of the place of amusement is not charging such
person for use of the place of amusement (e.g., the course’s golf pro,4 a nonprofit
organization), then the portion of the tournament participation entry fee that
represents the normal and customary charge to utilize the place of amusement (e.g.,
the green fee, court fee, driving range fee) is subject to the admissions tax and the
person conducting the tournament must be licensed and is responsible for remitting
the tax to the Department.
However, if the operator of the place of amusement and the person conducting the
tournament agree in writing that the applicable admissions tax will be turned over
to the operator of the place of amusement, then the operator will also be held
accountable to the State for such taxes and must maintain proper records with
respect to the tournament, as such monies are being held in trust for and as a debt to
the State.5
(4) If the tournament is conducted by someone other than the operator of the place
of amusement and that person rents the entire facility (clubhouse, parking area,
course, courts, restaurants, etc.) from the operator of the place of amusement, then
the portion of the tournament participation entry fee that represents the normal and
customary charge to utilize the place of amusement (e.g., the green fee, court fee,
driving range fee) is subject to the admissions tax and the person conducting the
tournament must be licensed and is responsible for remitting the tax to the
Department.
However, if the operator of the place of amusement and the person conducting the
tournament agree in writing that the applicable admissions tax will be turned over
to the operator of the place of amusement, then the operator will also be held
accountable to the State for such taxes and must maintain proper records with
respect to the tournament, as such monies are being held in trust for and as a debt to
the State.6
Note #1: If the normal and customary charge to utilize the place of amusement (e.g., the
green fee, court fee, driving range fee) is more than the tournament participation entry fee,
then the person conducting the tournament must remit the admissions tax on a portion of
the tournament participation entry fee that reasonably represents the charge to utilize the
place of amusement. If the charge to utilize the place of amusement is not reasonable or is
not supported by the books and records of the person conducting the tournament, then the
admissions tax will apply to the entire tournament participation entry.
4

At some golf courses, the golf pro is allowed to conduct one or more golf tournaments a year with the golf
course not charging the golf pro for use of the golf course.
5
This requirement represents longstanding Department of Revenue policy. See SC Technical Advice
Memorandum #89-26.
6
This requirement represents longstanding Department of Revenue policy. See SC Technical Advice
Memorandum #89-26.

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Note #2: With respect to Conclusions #2, #3 and #4 above, the exemption in Code Section
12-21-2420(4) for charges to members of certain nonprofit clubs for use of the facilities of
the nonprofit club of which they are a member is not applicable since the tournaments in
these conclusions are not being conducted by the nonprofit club that operates the place of
amusement. This exemption for charges to members would only apply to tournaments
conducted by such nonprofit clubs.
Note #3: See Code Section 12-21-2420 for a list of exemptions from the admissions tax
that, depending on the facts and circumstances, may apply.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Ray N. Stevens
Ray N. Stevens, Director
September 17
, 2009
Columbia, South Carolina

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