Is a privately owned, for-profit public golf course's membership fee (prepaid greens fees, letting members reserve tee times a day or two early) subject to New York's social/athletic club dues tax?

Plain-English summary

Putnam Country Club is one of two golf courses owned and run by North American Golf Properties, LLC (NAGP), a for-profit business. It's a public course with only 15 members — membership isn't advertised, and it's offered mainly as a convenience for people who'd rather pay their greens fees once a year instead of per round. The only real perk of membership is being able to reserve tee times a day or two earlier than non-members; otherwise members get no special rights, priority, or privileges. NAGP's hired manager has sole control over accepting new members, and members have no ownership interest in the club, no vote or role in management, and no say in choosing the manager or new members. The property isn't tied to any residential community, and the clubhouse's catering and café facilities are open to the general public with no member-only perks.

New York taxes dues paid to a "social or athletic club" — but a club or organization only exists, for tax purposes, if there's real membership control over things like social/athletic activities, elections, committee participation, member selection, or if members hold a proprietary interest. Restricting membership size purely for physical-capacity reasons (rather than by geography, income, or other exclusivity criteria) doesn't turn a business into a "club" either. The Department found Putnam squarely fails the club/organization test: members have zero control over anything and no ownership stake — it's simply a business that happens to let some customers pay annually instead of visit-by-visit. So there's no taxable "social or athletic club" here at all, meaning the dues tax under § 1105(f)(2) never applies to begin with.

On top of that, the Department found an independent, second reason the fees escape tax: they're described as prepaid greens fees — charges for use of a sporting facility that the member personally plays on — which fall under a separate exclusion for admission/use charges to sporting facilities where the patron is the participant (the same exclusion that covers bowling alleys and swimming pools). So even setting aside the club-or-organization analysis, these are participant-sport charges, not taxable club dues or admission charges.

What this means for you

Golf course and athletic-facility operators offering annual membership options

Whether a "membership" fee is taxable club dues turns on real governance control (proprietary interest, member votes, member-run activities/committees), not on whether you call the arrangement a "membership" — a business that simply lets customers prepay for regular use, with the owner retaining full control, generally isn't a taxable social/athletic club.

Businesses limiting membership size

Capping membership purely because of physical facility capacity doesn't create club/organization status; capping it by other criteria (geography, income, or similar exclusivity factors) can.

Accountants and tax professionals

This opinion is a clean two-layer analysis worth citing together: (1) the club/organization test under 20 NYCRR § 527.11(b)(5) turning on member control/proprietary interest, and (2) the independent participant-sporting-facility exclusion under § 1105(f)(1)/20 NYCRR § 527.10(d)(4) — either one alone can defeat taxability, and here both did.

Common questions

Q: Does calling a fee a "membership fee" automatically make it taxable club dues?
A: No — taxability depends on whether the organization is a genuine "social or athletic club" with real member control or ownership, not on how the fee is labeled.

Q: Can a business limit the number of members without becoming a taxable club?
A: Yes, if the restriction is based solely on physical facility capacity. Restricting membership by geography, income, or other exclusivity criteria is more likely to indicate a taxable club or organization.

Q: Are greens fees for playing golf taxed the same as regular admission charges?
A: No — charges to a patron for use of a sporting facility in which that patron personally participates (like golf, bowling, or swimming) are specifically excluded from the admission-charge tax.

Citations and references

Statutes and regulations:

• Tax Law § 1101(d)(6) (dues definition); § 1101(d)(7) (initiation fee definition); § 1101(d)(13) (social or athletic club definition)
• Tax Law § 1105(f)(1) (admission charge tax; sporting-participant exclusion); § 1105(f)(2) (social/athletic club dues tax)
• 20 NYCRR § 527.10(d)(4) (sporting facility participant exclusion); § 527.11 (club dues imposition; definitions)

Prior rulings and cases referenced:

• Cobleskill Golf and Country Club, Inc., TSB-A-94(13)S
• Lafayette Golf & Country Club, L.L.C., TSB-A-97(23)S
• Antlers Country Club, Inc., TSB-D-92(79)S
• Shanty Hollow Corporation v. New York State Tax Commission, 111 AD2d 968

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2002.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a02_46s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-02(46)S
Sales Tax
September 18, 2002

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S011204B

On December 4, 2001, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Putnam Country Club, 187 Hill Street, Mahopac, New York 10541.
Petitioner, Putnam Country Club, submitted additional information with respect to the Petition on
February 20, 2002 and April 26, 2002.
The issue raised by Petitioner is whether the fees charged for golf membership are subject
to sales tax.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioner, is one of two golf courses owned and operated by North American Golf
Properties, LLC (NAGP). NAGP is a for-profit, privately owned business entity doing business as
a New York limited liability company. The day-to-day operations of Petitioner are handled by the
manager who is hired by NAGP. Although Petitioner is a public course, there are 15 members.
Membership is not advertised or solicited and is generally provided as an accommodation to
individuals wanting to pay their fees once a year. Members are allowed to reserve tee-times a day
or two earlier than non-members. With this exception, membership does not give any other priority
rights, benefits or privileges. While membership is open to the public on a first-come, first-served
basis, the overall public nature of the course and lack of advertising and membership benefits,
accounts for the limited number of members. The manager, under direction of NAGP, maintains
sole control over the acceptance of new members.
Petitioner is not located within or affiliated with any community or development. There are
no residency requirements. Members do not own a proprietary interest in Petitioner. Members do
not participate in the management of Petitioner, the selection of the manager, the selection or
approval of new members, and they do not control, plan or conduct the social or athletic activities
of Petitioner. Petitioner describes membership fees as the pre-payment of greens fees.
There is a club house on the premises which has catering facilities and a café grill which are
open to the general public. While these facilities are operated by Petitioner’s staff, members do not
have any priority rights or other benefits in regard to these facilities and are not required to spend
a certain amount at these facilities.
Applicable Law and Regulations
Section 1101(d) of the Tax Law provides, in part:

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When used in this article for purposes of the tax imposed under subdivision
(f) of section eleven hundred five, the following terms shall mean:
*
*
*
(6) Dues. Any dues or membership fee including any assessment,
irrespective of the purpose for which made, and any charges for social or sports
privileges or facilities, except charges for sports privileges or facilities offered to
members’ guests which would otherwise be exempt if paid directly by such guests.
(7) Initiation fee. Any payment, contribution, or loan, required as a condition
precedent to membership, whether or not such payment, contribution or loan is
evidenced by a certificate of interest or indebtedness or share of stock, and
irrespective of the person or organization to whom paid, contributed or loaned.
*

*

*

(13) Social or athletic club. Any club or organization of which a material
purpose or activity is social or athletic.
Section 1105(f) of the Tax Law imposes sales tax on:
(1) Any admission charge where such admission charge is in excess of ten
cents to or for the use of any place of amusement in the state . . . except charges to
a patron for admission to, or use of, facilities for sporting activities in which
such patron is to be a participant, such as bowling alleys and swimming pools. . . .
(Emphasis added)
(2)(i) The dues paid to any social or athletic club in this state if the dues of
an active annual member, exclusive of the initiation fee, are in excess of ten dollars
per year, and on the initiation fee alone, regardless of the amount of dues, if such
initiation fee is in excess of ten dollars. . . .
Section 527.10(d)(4) of the Sales and Use Tax Regulations provides, in part:
Charges to a patron to or for the use of sporting facilities or activities in
which the patron is to be a participant are excluded from tax.
Section 527.11 of the Sales and Use Tax Regulations provides, in part:

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September 18, 2002

(a) Imposition. (1) A tax is imposed upon the dues paid to any social or
athletic club in this State if the dues of an active annual member, exclusive of the
initiation fee, are in excess of $10 per year.
(2) A tax is imposed on the initiation fee paid to any social or athletic club,
regardless of the amount of dues, if such initiation fee is in excess of $10.
*
*
*
(b) Definitions. As used in this section, the following terms shall mean:
*

*

*

(2) Dues. (i) The term dues includes:
(a) any dues or membership fee;
(b) any assessment, irrespective of the purpose for which made; and
(c) any charge for social or sports privileges or facilities.
*

*

*

(4) Initiation fee. Any payment, contribution or loan, required as a condition
precedent to membership, whether or not such payment, contribution or loan is
evidenced by a certificate of interest or indebtedness or share of stock, and
irrespective of the person or organization to whom paid, contributed or loaned.
*

*

*

(5) Club or organization. (i) The phrase club or organization means any entity
which is composed of persons associated for a common objective or common
activities. Whether the organization is a membership corporation or association or
business corporation or other legal type of organization is not relevant. Significant
factors, any one of which may indicate that an entity is a club or organization, are:
an organizational structure under which the membership controls social or athletic
activities, tournaments, dances, elections, committees, participation in the selection
of members and management of the club or organization, or possession by the
members of a proprietary interest in the organization. The organizational structure
may be formal or informal.
(ii) A club or organization does not exist merely because a business entity:

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*

*

*

(b) restricts the size of the membership solely because of the physical size of
the facility. Any other type of restriction may be viewed as an attempt at exclusivity;
*

*

*

Example 18: A club owned by an individual which attempts to restrict its
membership by geographic area, income, race, religion or any
other means, is a club or organization. However, a “club”
owned by an individual which restricts its membership only
because of the physical capacity of its facilities is not a club
or organization.
*

*

*

(6) Social club. A social club is any club or organization which has a
material purpose or activity of arranging periodic dances, dinners, meetings or other
functions affording its members an opportunity of congregating for social
interrelationship.
*

*

*

(7) Athletic club. (i) An athletic club is any club or organization which has
as a material purpose or activity the practice, participation in or promotion of any
sports or athletics.
Opinion
In Cobleskill Golf and Country Club, Inc., Adv Op Comm T&F, March 30,
1994, TSB-A-94(13)S, it was held that since members in the petitioner’s golf and country club held
no proprietary rights, had no control over its activities or management, and membership was
not restricted, the dues paid by members were not subject to sales tax. See also Lafayette Golf &
Country Club, L.L.C., Adv Op Comm T&F, April 17, 1997, TSB-A-97(23)S, and Antlers Country
Club, Inc., Dec Tax App Trib, November 19, 1992, TSB-D-92(79)S.
Petitioner owns, operates and manages the golf facility described in this Petition. The
members possess no proprietary rights in Petitioner, have no control over its social or athletic
activities, and do not participate in the selection of members or management. Based on the
foregoing, Petitioner is not a “social or athletic club” within the meaning of Section 1105(f)(2) of
the Tax Law. Therefore, dues and initiation fees paid by its members are not subject to State and
local sales taxes.

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The fees charged to Petitioner’s members are an admission to, for the use of, a sporting
facility. Such fees are excluded from tax under Section 1105(f)(1) of the Tax Law as charges for
“sporting activities in which such patron is to be a participant.” Shanty Hollow Corporation v
New York State Tax Commission, 111 AD2d 968.

DATED: September 18, 2002

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.