New York state bill clarifies amusement park tax

Posted | Contributed by Jeff

Tickets to amusement parks would be taxed on one-quarter of their value under a bill that has passed both houses of the Legislature. The bill is aimed at clarifying how New York’s sales tax applies to theme parks. Under state law, the tax applies to the admission price to parks but not the cost of rides.

Read more from The Democrat & Chronicle.

Is it just me or is that really high? Maybe I'm just uneducated when it comes to taxes, but that seems like a huge chunk of revenue being taken from the parks. I'd expect to see admission prices rise.

MGuy, what that is saying is that NY State will charge tax on 25% of the ticket cost - not that the tax is 25%.

Example - Ticket cost - $40
NY State Base Sales tax amount - $10 (25% of $40)
NY State effective Sales tax rate - 8.25%
Tax on that ticket owed to NY State - $0.83 (8.25% of $10)

Basically what the legislature is saying is that 75% of the revenue from the tickets pays for the rides - which is not taxable (as sales tax) but the admission to the park is (which is the remainder of your ticket price.)
*** This post was edited by redman822 6/17/2004 12:08:43 PM ***

...but, at the same time, if I go and spend $100 on a dress, presumably some of the money I'm giving the store goes toward the purchase of the dress, right? So, why am I not only paying sales tax on the part of my cost that is considered profit for the store?

I'm sure there's some really obvious difference, but I don't see it yet.

According to my tax accountant wifey, it is because the rides are considered an asset of the park. You are not buying the ride - you are buying the ability to get on the ride.

That is why only the admission is taxed - not the portion that goes to "build" the rides.*** This post was edited by redman822 6/19/2004 9:00:40 AM ***

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