In an Advisory Opinion, dated August 20, 2024, the petitioner, who charges its customers an entry fee into a locked room where a group of up to ten must solve puzzles, riddles, and other exercises with the means of escaping the room or solving a mystery, has asked the Department to advise on the taxability of such admission charges. According to the petitioner’s description, the rooms are a form of amusement where the missions provide mentally stimulating entertainment. The petitioner additionally states that supervising employees play a part in the mission and sometimes assist participants while in-character.
In New York, sales tax applies to “any admission charge…to or for the use of any place of amusement in the state.” Additionally, the law defines a place of amusement as any location offering facilities for entertainment, amusement, or sports. The law does include an exemption for admission charges to live dramatic or musical arts performances. The petitioner argues that its charges should be exempt from sales tax for multiple reasons, one being that the rooms offer a live dramatic presentation due to the in-character participation of its employees. However, according to the Department, the employees’ in-character interactions do not meet the qualification of a dramatic or musical arts performance.
Based on the description provided by the petitioner, the activities provided in the rooms align with the general understanding of the term “amusement” and the in-character interactions by the petitioners’ employees, do not qualify for an exemption. The Department concluded that the charges by the petitioner to enter the locked rooms as a means of entertainment are subject to sales tax under Tax Law 1105(f)(1). (New York Advisory Opinion TSB-A-24(36)S, August 20, 2024)