Are pool tables and shuffleboard tables in a bar subject to Texas sales tax, and does it matter whether they're coin-operated?

Plain-English summary

Someone planning to open a bar asked what kind of tax applies to pool and shuffleboard tables. The Comptroller's answer turns entirely on how the customer pays to use the table:

• Coin-operated tables: amusement services like pinball games, pool tables, and shuffleboard provided through coin-operated machines that the consumer operates directly are exempt from sales tax.
• Non-coin-operated tables: fees charged to customers to use pool tables and shuffleboard tables that aren't coin-operated are taxable as amusement services under Rule 3.298.

The letter also pointed the bar owner to where to find the sales tax rules online and how to apply for a sales tax permit (needed to issue resale certificates for taxable items purchased for resale).

What this means for you

Bar and pool hall owners

The tax treatment of your game tables hinges on the coin mechanism, not just the type of game. A coin-operated pool table where the customer inserts money to play is exempt; a table where you charge a fee (by the hour, by the game, or via a house tab) without a coin mechanism is taxable.

Accountants and tax professionals

A short, clear confirmation of the coin-operated-machine carve-out under Rule 3.298 as applied to bar game tables — useful whenever a client is deciding between coin-operated and staff/fee-based table access for amusement equipment.

Common questions

Q: Is a coin-operated pool table in a bar taxable?
A: No, coin-operated amusement machines operated directly by the consumer are exempt from sales tax.

Q: What if the bar just charges a flat fee to use the table instead of using a coin mechanism?
A: That fee is taxable as an amusement service under Rule 3.298.

Q: Does this apply to other bar games like pinball, not just pool and shuffleboard?
A: The letter specifically names pinball games, pool tables, and shuffleboard as examples of coin-operated amusement services covered by the exemption.

Q: Can I rely on this letter for my own bar?
A: No. This opinion is based on the facts presented, and other similar facts may provide a different result; it can be relied on only by the taxpayer it was issued to.

Citations and references

Rules:

• 34 Tex. Admin. Code Rule 3.298 (Amusement Services — coin-operated machines exempt; fee-based, non-coin-operated tables taxable)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200002035L

Original ruling text

February 10, 2000

"**"

Subject: Bar opening

Dear **:

This is in response to your request for a ruling on the following fact
situation and questions:

What kind of taxes would there be for pool and shuffle board in a bar?

Response: Amusement services, such as pinball games, pool tables, and
shuffleboard, provided through coin-operated machines that are operated by the
consumer are exempt from sales tax. Fees charged to customers to use
non-coin-operated pool tables and shuffleboard tables are taxable as amusement
services. See Rule 3.298 - Amusement Services.

Sales tax rules can be accessed on the Internet at:

http://www.window.state.tx.us/taxinfo/rulendx/ruleindex.html

You may download an application for a sales tax permit, which allows you to
issue resale certificates for taxable items that you will resell, at :

http://www.window.state.tx.us/taxinfo/taxforms/01-forms.html

This opinion is based on the facts presented. Other facts though similar may
provide a different result.

I hope this information answers your questions. If you need additional
information, please call me toll-free at 1-800-531-5441, extension 3-4502. The
direct line is 512/463-4502. You may also write to Tax Policy Division,
Comptroller of Public Accounts. You may also e-mail our tax help section at:

Gilbert Zamora

Tax Policy Division