95-085
Response
December 5, 1995
Request
Dear
XXXXX:
I
recently spoke with someone at your office, and they told me I should write to
you with a question about sales tax at our new business.
The
business is called XXXXX. We have four
golf simulators and charge money for people to play on the machines. A person can pay by the quarter-hour, or by
the round. We also have snacks and
drinks for sale, and know of course that we are to collect sales tax on those
items. The question is, should we
collect sales tax on the use of the simulators? And, is there a difference between charging by the round of golf,
or renting time on one? In one sense,
it is like playing at a golf course, in that typically the player will come to
us and pay about $$$$$ to play a round of 9 holes. However, in another sense it is like a video game center, in that
we are indoors, not on public land like a golf course, and the simulators are
made up of a computer and a big screen TV projector.
We
certainly would like not to have to collect sales tax. Golfers are used to paying a “round” number
for a round of golf, and likewise, people that play arcade games are not used
to paying tax on the tokens they buy.
It would help our new business survive if the overall cost is simpler,
and of course less.
If
you have any further questions about our business, please call me at
XXXXX. You could also call XXXXX in
Salt Lake City at XXXXX (XXXXX) with any questions about the machines
themselves. That is the company that
makes the simulators.
Thank
you,
XXXXX
XXXXX
RE:
Advisory Opinion - Application of sales tax to charges for use of golf
simulation machines.
Dear
XXXXX
We
have received your request for an advisory opinion regarding your obligation to
collect sales tax on charges for use of your golf simulation equipment. We find as follows:
Admission
and user fees charged for any amusement, entertainment, recreation, exhibition,
cultural or athletic activity are subject to Utah sales tax. You have likened the simulator activities to
both golf and video game machines. The
charges in both of these cases are taxable (although in the case of
coin-operated video machines, the tax is collected from the total proceeds
rather than individual transactions).
Charges to your customers to use the golf simulation equipment are
subject to sales tax.
With
regard to your food sales, some food sales are subject to a 1% restaurant tax
in addition to sales tax. Your letter
does not provide sufficient information to allow us to evaluate your liability
in that regard, so I am enclosing for your information a copy of the statute,
administrative rule and a portion of a tax bulletin which describes application
of the restaurant tax. If we can answer
any questions about this tax, please let us know.
For
the Commission,
Alice
Shearer
Commissioner