Were golf-cart rentals taxable at a municipal golf course even though municipal green and driving-range fees were exempt?

Plain-English summary

Municipal green fees and driving-range fees were exempt amusement services under § 151.3101.

Golf-cart rentals were different. The individual rented tangible personal property rather than buying an amusement service, so the municipality had to collect sales tax from nonexempt renters.

The letter distinguished golf carts transferred to individuals from property the city itself used to provide the amusement, such as course flags, which the city could buy tax-free under the cited rule.

Common questions

Were municipal green fees taxable? No under the cited exemption.

Were golf-cart rentals taxable? Yes.

Why? The cart was rented tangible personal property, not part of the exempt amusement service.

Citations and references

• Tex. Tax Code § 151.3101
• Tex. Tax Code §§ 151.005(2) and 151.008
• 34 Tex. Admin. Code Rule 3.322(g)
• 34 Tex. Admin. Code Rule 3.298(f)(4)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8912L0970E04

Original ruling text

December 12, 1989

Dear **:

Thank you for your letter dated December 6, 1989, concerning the
taxability of golf cart rentals.

Green fees and driving range fees are not taxable at municipal golf
courses because amusement services provided by a municipality are
exempted under section 151.3101.

Golf cart rentals are taxable. The exemption provided in section
151.3101 does not apply. An individual is renting tangible personal
property (golf carts), not paying for an amusement service.
Municipalities are required to collect sales tax on sales, leases or
rentals of taxable items. Please see sections 151.005(2) and
151.008 of the law and section (g) of Rule 3.322 Exempt
Organizations.

The City of ** does not use the golf carts to provide an
amusement service. As stated in the previous paragraph, the City
of * is renting taxable tangible personal property to
individuals who are not exempt entities. Section (f)(4) of Rule
3.298 refers to items such as golf course flags or bowling pins
or Ferris wheels, etc. that the provider of an amusement service
uses to provide the amusement. The City of **** can
purchase items such as golf flags tax free, but it cannot rent
golf carts to individuals tax free. The golf carts are not
transferred to individuals as part of the amusement service
provided by the City.

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

Please feel free to contact me if you have any additional
questions. You may write me, call toll-free 1-800-252-5555
(ext. 3-4685) from anywhere in the United States or phone
512/463-4685.

Sincerely,

Julie Pesl
Tax Correspondence