Were Texas country-club dues, initiation fees, and guest recreation fees subject to the new amusement-services tax?

Texas AG Opinion JM-211: Country Club Amusement Tax

Plain-English summary

Comptroller Bob Bullock asked whether the newly expanded Texas sales tax on "amusement services" applied to country-club social dues and initiation fees, additional golf and recreation charges, guest fees, and fees at athletic or sporting clubs. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

JM-211 did not answer any of those tax questions. Section 151.0101(b) stated that the comptroller "shall have exclusive jurisdiction" to interpret the subsection listing taxable services. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

The opinion said the legislature had clearly indicated that the comptroller should make the initial determination about the provision's construction. As a matter of policy, the Attorney General declined to answer until the comptroller furnished his own interpretation. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

JM-211 noted that the exclusive-jurisdiction language appeared on its face to contravene article II, section 1 of the Texas Constitution, but the comptroller had not asked about constitutionality and the opinion did not decide that issue. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

The opinion also suggested that a court might construe the provision more narrowly, as giving the comptroller authority only to issue rules consistent with the statute. It still left the requested tax classification unanswered. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

Currency note

This opinion was issued in 1984. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did JM-211 say country-club dues were taxable?

No determination was made. The Attorney General declined to answer whether social membership fees or monthly dues were subject to the amusement-services tax. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

Did the opinion decide the tax treatment of golf, recreation, or guest fees?

No. Those were among the four questions presented, but JM-211 left all four unanswered because the comptroller had not first supplied his construction of the statute. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

Why did the Attorney General defer to the comptroller?

Section 151.0101(b), as quoted in the opinion, gave the comptroller "exclusive jurisdiction" to interpret the subsection identifying taxable services. The opinion treated that text as a clear legislative preference for the comptroller to make the initial determination. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

Did JM-211 uphold the exclusive-jurisdiction provision as constitutional?

No. It observed a possible conflict with article II, section 1 but expressly did not address constitutionality because that question had not been asked. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

What did "amusement services" mean in the quoted 1984 law?

Section 151.0028 defined the term as providing amusement, entertainment, or recreation, while excluding specified educational or health services prescribed by a licensed healing-arts practitioner for education or health maintenance or improvement. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

Background and statutory framework

The opinion said chapter 151 imposed limited sales, excise, and use taxes and that legislation from the recent special session expanded taxable services to include amusement services. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

Article 7 of the 1983 special-session legislation amended the definition of "taxable item," added section 151.0101's taxable-services list, and added section 151.0028's amusement-services definition. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

JM-211's operative conclusion concerned allocation of interpretive responsibility, not the substantive reach of the tax. It stated that the Attorney General would not, as a matter of policy, answer a question whose initial determination the legislature had clearly left to the comptroller. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

Citations and references

• Tax Code sections 151.010, 151.0101, and 151.0028 supplied the taxable-item, taxable-services, and amusement-services provisions discussed in JM-211. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf
• Acts 1983, 68th Legislature, Second Called Session, chapter 31, article 7, section 2, at 534, contained the quoted exclusive-jurisdiction provision. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf
• Article II, section 1 of the Texas Constitution appeared in the constitutional issue that JM-211 noted but did not decide. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0211
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0211.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain. The linked PDF is authoritative.

The Attorney General of Texas

October 12, 1984

Honorable Bob Bullock
Comptroller of Public Accounts
L.B.J. State Office Building
Austin, Texas 78774

Opinion No. JM-211

Re: Whether country club fees are subject to the amusements tax

Dear Mr. Bullock:

Chapter 151 of the Tax Code imposes limited sales, excise, and use taxes on businesses operating within this state engaged in certain specified activities. Legislation enacted during the recently-completed special session designed to increase state revenues to offset increased state expenditures for public education expanded the tax to include "amusement services." See Tax Code ch. 151. Acts 1983, 68th Leg., 2nd C.S., ch. 31, art. 7, at 534-44. Section 1 of article 7 expands the definition of "taxable item" set forth in section 151.010 of the Tax Code to include "taxable services." Section 2 of article 7 adds section 151.0101 to the code, defining "taxable services" to include inter alia "amusement services." Section 151.0028 of the Tax Code was added by section 3 of article 7 and provides the following:

Sec. 151.0028. "AMUSEMENT SERVICES." "Amusement services" means the provision of amusement, entertainment, or recreation, but does not include the provision of educational or health services if prescribed by a licensed practitioner of the healing arts for the primary purpose of education or health maintenance or improvement.

In response to these and other amendments, you ask for our official opinion on the following four questions:

1. Are social membership initiation fees and/or monthly dues at a country club subject to amusements tax?

2. If the answer to question number (1) is "no," are the additional membership initiation fees and/or monthly dues for golf and recreation subject to tax?

3. Are guest fees for using club recreational facilities subject to amusements tax?

4. Are membership initiation fees and/or monthly dues at athletic and sporting clubs subject to amusements tax when the primary activity of the club involves recreational activities which would be subject to tax if an individual admission fee was charged?

We are unable to answer your questions because the legislature has seemingly removed from the authority of any official other than you the right to declare what constitutes "amusement services." Section 151.0101 of the Tax Code provides the following:

Sec. 151.0101. "TAXABLE SERVICES." (a) "Taxable services" means:

(1) amusement services;

(2) cable television services;

(3) personal services;

(4) motor vehicle parking and storage services; and

(5) the repair, remodeling, maintenance, and restoration of tangible personal property, except:

(A) aircraft;

(B) a ship, boat, or other vessel, other than a sports fishing boat or any other vessel used for pleasure; and

(C) the repair, maintenance, and restoration of a motor vehicle.

(b) The comptroller shall have exclusive jurisdiction to interpret Subsection (a) of this section.

Acts 1983, 68th Leg., 2nd C.S., ch. 31, art. 7, sec. 2, at 534.

You have not asked about, and accordingly we do not address the constitutionality of subsection (b). On its face, this language appears to contravene article II, section 1 of the Texas Constitution. It has been suggested, however, that a court might construe subsection (b) to confer authority on the comptroller only to promulgate rules not inconsistent with the statute. In any event, the legislature has clearly indicated its preference that the comptroller make the initial determination as to the proper construction of subsection (a). Accordingly, as a matter of policy, we decline to answer your questions until you have furnished us with your construction of those provisions.

The attorney general will not as a matter of policy answer a question whose initial determination the legislature has clearly indicated shall be left to the comptroller.

Very truly yours,

JIM MATTOX
Attorney General of Texas

TOM GREEN
First Assistant Attorney General

DAVID R. RICHARDS
Executive Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Jim Moellinger
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Rick Gilpin, Chairman
Colin Carl
Susan Garrison
Tony Guillory
Jim Moellinger
Nancy Sutton