Are membership dues paid to a fox-hunting club subject to New York's club dues sales tax?

Plain-English summary

A not-for-profit, member-owned fox-and-coyote hunting club -- recognized by the Masters of Fox Hound Association since 1929, governed by a Board of Trustees, and operating under New York's hunting regulations -- charges its members dues and subscriptions for the right to participate in mounted hunts with fox hounds. The club maintains no facilities for social or athletic purposes, doesn't sell meals, and provides no other member services, though it does maintain a fox hound kennel. It asked whether its dues are subject to sales tax.

New York generally taxes dues paid to "social or athletic clubs" over $10 a year. But effective October 1, 1996, the Department changed its long-standing policy and removed dues and initiation fees paid to "rod or gun clubs" (fishing and hunting clubs) from the sales tax entirely. Based on the club's stated sole purpose -- hunting fox and coyote on horseback -- and its lack of social or athletic facilities, meal service, or other member amenities, the Department found it qualifies as a hunting/rod-or-gun club under that 1996 policy, so its membership dues aren't subject to sales tax.

What this means for you

Hunting, fishing, and similar sporting clubs

If your club's real purpose and activities are genuinely centered on hunting or fishing -- not on social or athletic amenities, dining, or other member services -- your dues and initiation fees should be exempt from New York sales tax under the Department's 1996 policy change, regardless of how the club is otherwise organized (not-for-profit, member-owned, etc.).

Social and athletic clubs more generally

This exemption is narrow and specific to rod/gun/hunting clubs -- if your club offers social or athletic facilities, meals, or other member services beyond the sporting activity itself, dues over $10/year likely remain taxable under Tax Law § 1105(f)(2).

Accountants and tax professionals

The controlling test is functional, not formal: does the club's activity mix look like a genuine hunting/fishing club (no social/athletic facilities, no meals, no other member services), or does it look like a broader social/athletic club that happens to also offer hunting or fishing? Compare against the Department's companion Old Chatham Hunt Club ruling for a nearly identical fact pattern reaching the same result.

Common questions

Q: Are dues paid to a hunting or fishing club taxable in New York?
A: No, effective for membership periods beginning on or after October 1, 1996 -- dues and initiation fees paid to rod or gun clubs are no longer subject to New York sales tax.

Q: What makes a club a "rod or gun club" for this purpose?
A: A club whose sole or primary purpose is hunting or fishing activity, without social or athletic facilities, meal service, or other member amenities typical of a social or athletic club.

Q: Does maintaining a kennel or similar sporting-related facility disqualify a club from this exemption?
A: No -- a facility directly tied to the hunting/fishing purpose (like a fox hound kennel here) doesn't count as a disqualifying social or athletic amenity.

Q: Can another club rely on this ruling for its own dues?
A: No. It binds the Department only for this petitioner and these facts; another club's mix of activities and facilities needs its own review.

Citations and references

Statutes and guidance:

• Tax Law § 1105(f)(2)(i) (dues to social or athletic clubs)
• TSB-M-96(16)S (Dues and Initiation Fees Paid to Rod or Gun Clubs No Longer Subject to Sales Taxes, Dec. 23, 1996)
• TSB-A-04(13)S (Old Chatham Hunt Club, Inc., May 24, 2004)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2005.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a05_19s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-05(19)S
Sales Tax
May 26, 2005

Office of Tax Policy Analysis
Technical Services Division
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S050202C

On February 2, 2005, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Rombout Hunt Inc., c/o Suzanne Cannavino, 11 Browning Road, Hyde
Park, NY 12538.
The issue raised by Petitioner, Rombout Hunt Inc., is whether dues paid by its members
are dues or initiation fees paid to a rod or gun club which are not subject to sales tax.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioner was recognized by the Masters of Fox Hound Association in 1929 and has been
run as a not-for-profit member owned corporation since its inception. Petitioner is governed by a
Board of Trustees on behalf of its membership. Petitioner charges dues and subscriptions for
membership rights to participate in hunting. Petitioner is a hunting club whose sole purpose is to
hunt fox and coyote on horseback using American fox hounds, according to the hunting
regulations administered by the New York State Department of Environmental Conservation.
Petitioner does not maintain facilities for social or athletic purposes, sell meals or provide
member services, but does maintain a fox hound kennel.
Applicable law and regulations
Section 1105(f) of the Tax Law imposes sales tax, in part, on:
(2)(i) The dues paid to any social or athletic club in this state if the dues . . . 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. . . .
Technical Services Bureau Memorandum, entitled Dues and Initiation Fees Paid to Rod
or Gun Clubs No Longer Subject to Sales Taxes, December 23, 1996, TSB-M-96(16)S, provides,
in part:
Effective for membership periods beginning on or after October 1, 1996, dues and
initiation fees paid by members to rod or gun clubs (e.g., fishing and hunting clubs) are
no longer subject to the New York State and local sales taxes. These taxes were imposed
under sections 1105(f)(2), 1107 and 1109 of Article 28 and pursuant to the authority of
Article 29 of the Tax Law. The Tax Department has examined its longstanding policy
concerning the taxability of dues and initiation fees paid to these clubs and has
determined that such policy should be revised.

-2­
TSB-A-05(19)S
Sales Tax
May 26, 2005

Opinion
Petitioner is a not-for-profit club governed by a Board of Trustees on behalf of its
members. Petitioner charges dues and subscriptions for membership rights to participate in
hunting. The sole purpose of Petitioner’s hunting club is to hunt fox and coyote on horseback
using American fox hounds. Petitioner does not maintain facilities for social or athletic
purposes, sell meals or provide member services.
Petitioner is a not-for-profit member owned corporation created for the purpose of
hunting fox and coyote on horseback. Based upon its stated purposes, and its activities as
represented in this Advisory Opinion, Petitioner is a hunting club or rod or gun club within the
meaning of TSB-M-96(16)S, supra. Therefore, the membership dues or fees paid by its
members are not subject to the sales tax imposed by section 1105(f) of the Tax Law. See Old
Chatham Hunt Club, Inc., Adv Op Comm T&F, May 24, 2004, TSB-A-04(13)S.

DATED: May 26, 2005

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.