Were green fees, yearly golf-course memberships, golf-cart rentals, and pull-cart rentals taxable when provided by a Texas governmental entity?

Plain-English summary

Green fees and yearly memberships representing admission to a golf course were not taxable amusement services when provided by the State of Texas, a municipality, county, school district, special district, or another Texas political subdivision.

The exemption did not extend to taxable items those entities sold, leased, or rented. Golf-cart fees and pull-cart fees were taxable rentals, as were merchandise sales such as food, clothing, and equipment.

Temporary custody did not change the result: a cart rental was treated like a taxable sale of tangible personal property for this purpose.

Common questions

Were governmental green fees taxable? No.

Were yearly admission memberships taxable? No.

Were golf-cart and pull-cart fees taxable? Yes.

Did temporary possession make the cart rental exempt? No.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8909L0960F04

Original ruling text

September 25, 1989

Dear **:

I am responding to your letter regarding amusement services provided
by governmental entities. You specifically requested clarification
regarding green fees, cart fees, pull cart fees, and yearly membership.

Green fees and yearly membership fees that represent admission to the
golf course are not taxable as amusement services as long as they are
provided by the State of Texas, a municipality, county, school
district, special district, or other political subdivision of the State
of Texas. These exemptions are available, along with other amusements
provided by non-profit entities, because the legislature provided for
them in the statute.

However, these entities must collect and remit tax on the sale, lease,
or rental of other taxable items. These items include golf cart
rentals (cart fees) and pull cart fees (pull cart rentals).

You stated that you charge tax on all merchandise sold such as food,
clothing, and equipment. Pull cart and golf cart rentals (fees) are
treated the same as the sale of these items and are taxable even
though the purchaser has only temporary custody of the item. I am
enclosing a copy of the rule regarding the rental and lease of
tangible personal property. Although the rule is out-dated on issues
such as installation charges, it is correct regarding the treatment
for tax for rentals versus sales.

This opinion is based on the facts presented. If there are additional
or different facts, the opinion may change.

You may also write to Tax correspondence Comptroller of Public Accounts.

Sincerely,

Tax Policy Division
Tax Correspondence