Fairland Amusements, Inc. v. State Tax Com'n of State of N.Y.
| Decision Date | 18 April 1985 |
| Citation | 487 N.Y.S.2d 879,110 A.D.2d 952 |
| Parties | FAIRLAND AMUSEMENTS, INC., Respondent, v. STATE TAX COMMISSION OF the STATE of New York, Appellant. |
| Court | New York Supreme Court — Appellate Division |
Robert Abrams, Atty. Gen. (Francis V. Dow, Albany, of counsel), for appellant.
Davis, Nesper & McElvein, Buffalo (Gabriel J. Ferber, Buffalo, of counsel), for respondent.
KANE, J.P., and MAIN, HARVEY, YESAWICH and MIKOLL, JJ.
KANE, Justice Presiding.
Appeal from a judgment of the Supreme Court at Special Term, entered August 22, 1984 in Albany County, which, inter alia, granted plaintiff's motion for summary judgment.
Plaintiff is a company that provides portable amusement rides, such as Ferris wheels and merry-go-rounds, at fund-raising activities sponsored by various organizations throughout New York. Plaintiff is paid by the organization involved based upon a percentage of the moneys received from sales of tickets which are purchased by the general public for the individual rides. There is no charge to the general public for admission to the site where the rides are located.
The issue presented in this case is whether defendant properly concluded that plaintiff should have collected sales taxes upon the tickets which people purchase to use plaintiff's rides.
Tax Law § 1105(f)(1) provides, in pertinent part, that a sales tax should apply to "[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". The term "place of amusement" is defined by Tax Law § 1101(d)(10) as "[a]ny place where any facilities for entertainment, amusement, or sports are provided", and the term "admission charge" is defined by Tax Law § 1101(d)(2) 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".
In this regard, Justice Hancock stated in his dissent to Outdoor Amusement Business Assn. v. State Tax Comm., 84 A.D.2d 950, 952, 447 N.Y.S.2d 69, revd. on dissenting mem. below 57 N.Y.2d 790, 455 N.Y.S.2d 586, 441 N.E.2d 1104 that where "the charge is not for admission or for the use of the facilities, it is not taxable" (emphasis supplied), thus indicating that if a charge is for the use of the facilities, it is taxable. Indeed, Justice Hancock specifically stated that such a taxable use of facilities included the riding of a Ferris wheel. This common-sense reasoning was adopted by the Court of Appeals and, in our opinion, applies here. Consequently, the admission charge to use the amusement rides in question would be taxable.
Judgment reversed, on the law, defendant's motion for summary judgment granted and complaint dismissed, without costs.
The judgment entered at Special Term should be affirmed.
Tax Law § 1105(f)(1) and the definitions applicable thereto set forth a two-step procedure to determine if plaintiff is liable for sales taxes on tickets sold to the public for its rides. First, the moneys paid must be an admission charge, either a fee paid for entrance to a place or for the use of the facilities. Here, the moneys paid for tickets clearly are fees paid for the use of the facilities (see Outdoor Amusement Business Assn. v. State Tax Comm., 57 N.Y.2d 790, 455 N.Y.S.2d 586, 441 N.E.2d 1104, 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. "Place of amusement" may be interpreted as meaning only the physical space within which the amusement is provided or the amusement facility itself. Applying the rationale of Matter of Wien v. Murphy, 28 A.D.2d 222, 284 N.Y.S.2d 303, lv. denied 22 N.Y.2d 646, 295 N.Y.S.2d 1027, 242 N.E.2d 493 and Bathrick Enterprises v. Murphy, 27 A.D.2d 215, 277 N.Y.S.2d 869, affd. 23 N.Y.2d 664, 295 N.Y.S.2d 489, 242 N.E.2d 745, it appears that if plaintiff's rides were located in a building, an admission charge to enter the...
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