SALT Report 2867 – The New Jersey Division of Taxation’s quarterly newsletter discusses the taxability of gaming tables provided by a casino-style entertainment company. The Taxpayer provides these services at events held in a location chosen by its customer. Generally, the contract requires that the Taxpayer provide the customer with gaming tables and employees to operate the tables. The Taxpayer requested a ruling as to whether its charges for the gaming tables that are used to provide the casino gaming service are taxable when billed to the customer.
In its response, the Division referred to the definition of “sales price” as provided in N.J.S.A. 54:32B-2(oo), Sales price is the measure subject to sales tax and means the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following:
- The seller’s cost of the property sold
- The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller
- Charges by the seller for any services necessary to complete the sale
- Delivery charges
Based on the above, the Division determined that the entertainment service provided by the Taxpayer is not subject to sales tax. Further, the Division stated that the tables provided by the Taxpayer are not subject to tax as they are part of the sales price of the nontaxable entertainment service. However, because the tables are used in the provision of entertainment services, the Taxpayer is required to pay sales or use tax when the tables are purchased.
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