concurring in part and dissenting in part.
I concur with the conclusion of the majority opinion that the tax in question was sufficiently paid under protest to justify the maintenance of this action.
I also agree that the gondola and chair lift system at the 1982 World’s Fair served incidentally as a transportation system for a few employees and as a means for patrons of the fair to move from one place to another. The system, however, was designed to accommodate 4,480 persons per hour and was an integral part of the amusement facilities at the 1982 World’s Fair. In my opinion the Chancellor correctly concluded that the function of this system as a “transportation system” as distinguished from a “place of amusement” was incidental almost to the point of being de minimis, and that its overwhelmingly primary purpose was for amusement and entertainment.1
I agree with the conclusions of the Chancellor as follows:
“The rides did provide transportation between distant points of the Fair Grounds, and provided to an extent a means for disabled persons to get about the Grounds especially providing them access to the Folklife area which was atop a hill, by the gondola ride, which had one of its terminals there. However, the rides provided just that, rides for those enjoying the Fair, a past time, (sic) and thus an amusement. The rides also provided an overview of large portions of the Fairgrounds, and therefore were entertaining [Citation omitted]. The entire Fair was certainly a place of amusement, and the rides operating from one place to another all within that place of amusement were thus themselves part of, and themselves a place of amusement. The fact that while providing an amusement within a place of amusement the rides also transported the riders from one place to another within the place of amusement does not change the character of the rides from being themselves a place of amusement within the meaning of the taxing statute. Put another way, even viewing the rides as transportation, they were also taxable places of amusement under the circumstances.”
Filed as Exhibit 2 in the record was the lease agreement between the Knoxville International Energy Exposition and the taxpayer, Sky Transpo. The contents of this document, in my opinion, are quite revealing as to the intentions and understandings of the parties themselves.
The agreement executed in September, 1981 (about eight months before the Fair opened), stated that the lessee, Sky Trans-po, desired to construct and maintain “a concession” for a specific term, to end on December 31, 1982, removal of the improvements to commence in November 1982. Section 3 of the Agreement of Lease called the project a “Chairlift and/or Gondola” and sometimes referred to it as a “Concession.” Lessee was to be responsible for appropriate “signage and graphics”, and Section 3(b) provides in part:
“Lessee shall provide as approved by the KIEE Design Review Board thematic treatments of the themed rides and attractions to compliment (sic) The 1982 World’s Fair theme and design.”
In Section 3(c) the lessee was given the right and obligation as part of its operation to sell the Stokely Van-Camp product “Gatorade” from a portable cart or carts or from other units supplied by the lessee and approved by the Knoxville International Energy Exposition, this product to be sold in such manner at all times when the gondola was in operation. The section provides:
*133“The cart(s) or other sales unit(s) shall be appropriately themed in keeping with the Folklife area and the sales personnel shall be appropriately costumed, all as approved by KIEE.”
The Knoxville International Energy Exposition was to receive twenty percent of the gross receipts of the sales of this product, and the parties agreed to execute a separate standard form “Concession Lease type Agreement” relating to the sale of that product.
The theme and color code of the chair lift and gondola system were to be selected by the KIEE, and Section 4 of the lease contains an agreement that the chair lift and gondola “will offer much of the same excitement and overall ambience which is found in the modern day successful theme park.” It also provides:
“The theming of the base station shall be as mutually agreed by the Design Review Board of KIEE and Lessee. The theme shall be designed and constructed by Lessee to attract persons to the Chairlift and Gondola and shall blend with the area of destination and origin. In the case of the Gondola and its association with the Folklife Festival area and Stokely Yan-Camp, Inc., both base stations shall be based on a theme, as mutually agreed upon between KIEE and Lessee, designed to attract people to the Folklife Festival area but shall be in keeping with the overall theme of the Fair.” (Emphasis added).
In Exhibit C to the lease agreement the financial arrangements between the parties are stated. Subsection 2 provides as follows:
“The fee to KIEE for the Chairlift and Gondola shall be based on the gross revenue {gross revenue to be defined as equal to 95% of total gross receipts of Lessee; provided, however, if the local amusement tax is adjusted, the definition of gross revenue may be adjusted) of ride tickets sold from all outlets or sources, including main gate booths, central ticket booths, group sales, tour and travel sales and other special promotional packages.” (Emphasis added).
There follows a schedule of percentages of gross revenues to be paid to the lessor. It is clear from the language quoted above that the parties contemplated that appel-lee’s operation would be subject to the specific five percent amusement tax involved in this case. The rental paid to the lessor would be appropriately altered if there should be any change in the rate of that tax. Otherwise it was based upon 95% of appellee’s gross revenues from the system.
In my opinion this operation, viewed from a practical as well as a legal standpoint, was an integral part of the Exposition and existed primarily as an additional attraction and amusement therein. The parties contemplated that the amusement tax involved here would be paid by the lessee and that the lessor’s rent would take the payment of that tax into account. For the lessee now to contend that the tax was not applicable to its operations, in my opinion, is wholly untenable.
I would reverse the judgment of the Court of Appeals and reinstate the judgment of the Chancellor. I am authorized to state that Justice Drowota concurs in this opinion.
. The taxes paid under protest for the months June through October, 1982 were $137,469.38. Assuming this to be 5% of gross revenues, the system generated revenues of about two and three-quarters millions of dollars.