PLACES SUBJECT TO ADMISSIONS TAX -- CITIES AND TOWNS -- BOWLING ALLEYS -- POOL AND BILLIARD ROOMS
An ordinance authorized by RCW 35.21.280 providing that a tax may be charged on an admission "to any place" applies to any amusement location in a fixed, definite, and stationary spot, and includes bowling alleys and pool and billiard rooms, but a charge made merely for a service or rental of equipment, such as hunting and fishing equipment and television cable service, not made for admission to a place, may not be subject to such tax under the usual circumstances.
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December 2, 1955
Honorable Roy Mundy
26 B Street S. W.
Ephrata, Washington Cite as: AGO 55-57 No. 166
We are in receipt of your request for an opinion from this office concerning the application of the admission tax (RCW 35.21.280) to the charge made for the use of bowling alleys, golf courses, pool and billiard rooms, hunting and fishing equipment, television cable services, and rowboats.
We answer your question as follows:
An ordinance, authorized by RCW 35.21.280 providing that a tax may be charged on an admission "to any place," may apply to any place located in a fixed, definite and stationary spot and includes bowling alleys and pool and billiard rooms, but a charge made merely for a service or rental of equipment, such as hunting and fishing equipment and television cable service, not made for admission to a place, may not be subjected to such tax under the usual circumstances.
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The pertinent sections of chapter 35, Laws of 1951, provide as follows:
"Every city and town may levy and fix a tax of not more than one cent on twenty cents or fraction thereof to be paid by the person who pays an admissioncharge to any place. This includes a tax on persons who are admitted free of charge or at reduced rates to any place for which other persons pay a charge or a regular higher charge for the same privileges or accommodations. The city or town may require anyone who receives payment for an admission charge to collect and remit the tax to the city or town.
"The term 'admission charge' includes:
"(4) A charge made for rental or use of equipment or facilities for purposes of recreation or amusement; if the rental of the equipment or facilities is necessary to the enjoyment of a privilege for which a general admission is charged, the combined charges shall be considered as the admission charge;" (Emphasis supplied)
The above statute authorizes cities and towns to impose a tax on admission charges "to any place" for purposes of recreation and amusement. The tax can be charged only for admission of a person "to any place." Section 4 of the above statute merely further explains what is to be included in the definition of an admission charge.
While there has been no Washington decision interpreting this statute, several cases have interpreted the Federal admission tax which is somewhat analogous to our statute. Title 26 U.S.C.A. § 4231, provides:
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"A tax of 1 cent for each 10 cents or major fraction thereof of the amount paidfor admission to any place, including admission by season ticket or subscription * * *." (Emphasis supplied)
Bee's Old Reliable Shows, Inc. v. Glenn, 107 F. Supp. 1016 (1952), interpreted the phrase "admission to any place." The carnival company argued that ferris wheels, merry-go-rounds, and other like amusement facilities were not "places" within the meaning of the statute. But the court held that the tax applied to admissions for rides on the merry-go-round, ferris wheel, roto-whip, and train ride because these devices were located in a fixed, definite and stationary spot and constituted "places" within the meaning of the internal revenue code. Accord:Wilmette Park District v. Campbell, 338 U.S. 411, 94 L.Ed. 205, 79 S.Ct. 195.
Quoting from Treasury Regulation 43, § 101.03, the court stated at page 1018:
"'The tax under sec. 1700 (a) of the Code is on the amount paid for admission to any place. "Place" is a word of very broad meaning, and it is not defined or otherwise limited by the Code. But the basic idea it conveys is that of a definite enclosure or location. The phrase "to any place" therefore, does not narrow the meaning of the word "admission," except to the extent that it implies that the admission is to a definite enclosure or location.'"
The phrase "admission to any place" was also defined in Fritz v. Jarecki, 189 F. (2d) 445. Applicability of the tax on admissions to ferris wheels, merry-go-rounds, miniature gasoline autos and a pony ride was questioned. While the tax was mentioned with respect to the ferris wheels and merry-go-rounds, the rides on the miniature gasoline autos and the ponies were held not subject to the admissions tax because the charges for the rides were not for admission to a "place."
See also an opinion of the general counsel, Bureau of Internal Revenue, 12 Int. Rev. Bul. No. 18 (1933) [[12 I.R.B. No. 18]], p. 16, holding that sight-seeing flight tickets are not subject to the admissions tax, since charges made for a [[Orig. Op. Page 4]] ride in an aircraft, not affixed to the earth, are not amounts paid for admission to a "place."
Applying the above reasoning to the various types of amusements and recreational facilities about which you inquire, it appears that bowling alleys, golf courses, and pool and billiard rooms, being limited to a confined area, are included within the word "place," and therefore the charges for the use of such facilities may be subjected to the admissions tax. However, the rental of hunting or fishing equipment and rowboats to be used anywhere, and charges made for television cable service, cannot be construed as charges for admission to a place. These latter charges consequently may not be subjected to the tax.
In passing, we note that the tax imposed by the ordinance is one of the highest, if not the highest admission tax, imposed in the state, and as such will in all likelihood have an adverse effect on the businesses in question. However, like all legislative questions, the propriety is for the council to determine. Our observations go only to the legality of the legislative action, not to its propriety.
We hope the above analysis will be of assistance to you.
Very truly yours,
MAURICE M. EPSTEIN
Assistant Attorney General