Texas Letter Ruling 9210L1200G11: Medical Air Services — Membership/Initiation Fee For Emergency Medical Flights, Organ Delivery, Mortal Remains Return

Subject

Medical Air Services — Membership/Initiation Fee For Emergency Medical Flights, Organ Delivery, Mortal Remains Return

Plain-English summary

A taxpayer asked the Texas Comptroller whether memberships in a medical emergency association (referred to as "ASSOCIATION" to protect its identity) are taxable. The association charged annual dues plus a one-time initiation fee. In exchange, members were eligible for emergency medical flights, transplant organ delivery, return of mortal remains, and vehicle return in case of injury or illness away from home, among other related services. Importantly, membership did not entitle a member to admission to any medical, athletic, or recreational facility.

The Comptroller ruled that membership in a medical emergency association like this one is not taxable as an amusement service under Rule 3.298. As a result, both the initiation fees and the annual dues paid to the association are not subject to tax.

The Comptroller noted that this opinion is based on the specific facts presented, and that other facts, even if similar, could lead to a different result.

What this means for you

Medical emergency / air ambulance membership associations

If your organization charges dues and initiation fees for a membership program that provides emergency medical flights, organ delivery, remains return, or similar emergency transport services — and does not grant members admission to a medical, athletic, or recreational facility — this ruling indicates the Comptroller would not treat those dues and fees as taxable amusement services under Rule 3.298.

Accountants and tax professionals

The key fact driving the outcome here is that membership did not include admission to any facility. That distinction is what kept the association's dues and initiation fees out of Rule 3.298's amusement services tax. Because this ruling is based on the specific facts presented to the Comptroller, it should not be treated as blanket authority for every membership arrangement — organizations with even slightly different facts (for example, if membership included access to a facility) could see a different result.

Common questions

Q: Are dues and initiation fees for this medical emergency association taxable?
A: No. The Comptroller ruled that membership in the medical emergency association is not taxable under Rule 3.298, Amusement Services, so both the initiation fees and the annual dues are not taxable.

Q: Why wasn't this treated as a taxable amusement service?
A: The ruling doesn't spell out the full reasoning behind Rule 3.298, but it specifically notes that ASSOCIATION membership did not entitle the member to admission to any medical, athletic, or recreational facility — a fact the Comptroller highlighted before concluding the dues and fees were not taxable.

Q: What services did the membership provide?
A: According to the ruling, members were eligible for emergency medical flights, transplant organ delivery, return of mortal remains, vehicle return in case of injury or illness away from home, and other related services.

Q: Does this ruling apply to any membership association?
A: The Comptroller expressly stated that this opinion is based on the facts presented, and that other facts, even if similar, may produce a different result. It is specific to the taxpayer who requested it.

Citations and references

Rules cited:

• 34 Tex. Admin. Code Rule 3.298 (Amusement Services)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9210L1200G11

Original ruling text

October 20, 1992

Dear **:

Thank you for your letter regarding the taxability of memberships in the
** (ASSOCIATION) which charges annual dues and a one-time initiation
fee. Members are eligible for emergency medical flights, transplant organ
delivery, mortal remains return, vehicle return in the case of injury or
illness away from home, and other related services. ASSOCIATION membership
does not entitle the member to admission to any medical, athletic, or
recreational facility.

Membership in a medical emergency association is not taxable under Rule 3.298,
Amusement Services. Therefore, initiation fees and dues paid to ASSOCIATION
would not be taxable.

This opinion is based on the facts presented. Other facts though similar may
provide a different result.

If you have other questions or need more information, you may call me at
1-800-252-5555, extension 3-4502. The regular number is 512/463-4600. You may
also write to Tax Administration Division at the above address.

Sincerely,

Gilbert Zamora
Tax Administration Division