1605 Book Center, Inc. v. Tax Appeals Tribunal, 83 N.Y.2d 240 (1994)
Receipts from coin-operated live peep show booths constitute taxable admission charges for the use of a place of amusement under New York Tax Law § 1105(f)(1).
Summary
The New York Court of Appeals determined that sales tax applies to the gross receipts derived from coin-operated live peep show booths. The appellant, 1605 Book Center, operated a business that included live peep show booths where patrons deposited coins to view or converse with live entertainers. The court found that these booths qualified as a “place of amusement” and the deposited coins as an “admission charge” within the meaning of Tax Law § 1105(f)(1). This determination affirmed the Tax Appeals Tribunal’s decision and reinforced the broad interpretation of the statute to ensure the collection of designated taxes.
Facts
1605 Book Center, Inc. operated a business in Times Square that included sexually oriented materials, a movie theater, and live peep show booths. Patrons deposited coins in these booths to view nude or partially nude females performing on a stage or to converse with scantily dressed women in “fantasy booths.” A glass partition separated the patron from the performer, and a curtain would part for a limited time after a coin was deposited. The State Division of Taxation assessed sales and use taxes on the revenue from these peep shows.
Procedural History
The State Division of Taxation issued a notice of determination and demand for payment of sales and use taxes. 1605 Book Center challenged the tax assessment. An Administrative Law Judge upheld the tax assessment on the live peep shows and fantasy booths. The Tax Appeals Tribunal affirmed this decision, rejecting the claim of selective enforcement. 1605 Book Center then commenced an Article 78 proceeding, which the Appellate Division confirmed, dismissing the petition. This appeal followed.
Issue(s)
Whether the receipts derived from coin-operated live peep show booths constitute taxable admission charges for the use of a place of amusement under Tax Law § 1105(f)(1)?
Holding
Yes, because the booths qualify as a place of amusement, and the coins deposited qualify as an admission charge as defined by the statute. The Court reasoned that the legislature intended to capture this type of amusement within the broad scope of the taxing statute.
Court’s Reasoning
The Court held that the critical terms, “admission charge” and “place of amusement,” are expansively defined in the Tax Law. The court emphasized that the booths provided a private space where patrons could view or interact with live performers after depositing a coin, making it analogous to a theater. "The booth thus qualifies as a place of amusement and the coin deposit qualifies as an admission charge within the contemplation and embrace of the taxing statute." The Court distinguished this situation from the use of mechanical devices, highlighting the spontaneous, human element of interacting with live performers. The Court also noted that the statute specifically excludes certain admission charges to specific places of amusement, but live peep show booths and fantasy booths are not among those exemptions. The court stated, "the expression of one is the exclusion of others, supports the conclusion that what was omitted from the exemptions was not intended to be excluded from the otherwise comprehensive taxable sweep of section 1105 (f) (1)." Furthermore, the Court distinguished this case from Fairland Amusements v. State Tax Commn. because the entertainment at issue here – viewing or speaking with live performers – is not comparable to amusement rides. The court emphasized that the core reality was human interaction in exchange for money. The court also rejected the argument that the tax treatment was inconsistent with the treatment of film booths as those were sufficiently distinguishable to allow for differential treatment. The Court prioritized a practical construction aligned with the legislative intent to tax admissions to places of amusement.