Were a private golf and country club's one-time initiation fees and renewable annual membership fees subject to Florida sales tax?

Plain-English summary

Both the one-time initiation fee and the renewable annual membership fee were taxable as admissions to the private golf and country club. Each payment bought the right to use the club's recreational facilities.

The timing differed by plan. A regular-plan member owed tax on the full initiation fee when joining. An annual-plan member owed tax on each year's fee when that fee became due.

The Department treated the club's non-equity structure as within the rule taxing initiation fees paid to equity or non-equity private and membership clubs.

What this means for you

Labeling a charge an initiation fee or an annual fee did not remove it from tax. The key fact was that payment was required for membership and use of golf and country-club facilities.

Deferred or recurring payment structures also did not postpone the applicable tax beyond the transaction or due date identified by the ruling.

Common questions

Q: Was the one-time initiation fee taxable? Yes, in full when the member joined.

Q: Were renewable annual fees taxable? Yes, each annual fee was taxable when due.

Q: Did it matter that the memberships were non-equity? No. The cited rule covered initiation fees paid to both equity and non-equity private or membership clubs.

Q: Why were the fees treated as admissions? Florida's cited definition included dues and fees paid to private clubs providing recreational facilities such as golf, tennis, and swimming.

Citations and references

• Fla. Stat. § 212.02(1) — admissions include private-club recreational dues and fees
• Fla. Stat. § 212.04(1) — tax on admissions
• Fla. Stat. § 212.06(1)(a) — timing for cash, credit, installment, and deferred-payment transactions
• Fla. Admin. Code r. 12A-1.005(5)(d)1. — taxable private-club initiation and periodic fees
• Fla. Admin. Code r. 12A-1.056(1) — tax due at the transaction
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97A-062

Original ruling text

SUMMARY

Initiation fees and annual fees paid for the right to use
club facilities are taxable pursuant to Section 212.04,
F.S. Initiation fees are taxable, in full, when paid by the
member at the time of joining, and the annual fees are
taxable when due.

Sep 24, 1997

Re: Technical Assistance Advisement 97A-062
Sales and Use Tax
Membership Fees; Initiation Fees; Annual Fees
Section 212.04(1), Section 212.02(1)
Rule 12A-1.005(5), F.A.C.
XXX (the "Taxpayer")

Dear:

This is in response to your letter of June 27, 1997,
requesting a technical assistance advisement (TAA) concerning
the application of sales tax to membership fees charged by a
golf and country club.

FACTS

The Taxpayer is a privately owned golf and country club
(the "Club"). The taxpayer sells non-equity memberships in its
Club. A potential member ("Participant") has a choice of either
the Regular Membership Plan or the Annual Membership Plan as
provided under the Family Plan, Family Limited Plan, or Senior
and Corporate Plan. The Regular Membership Plan requires
Participant to pay a one time initiation fee of $XX. The Annual
Membership Plan requires Participant to pay an annual fee of
$XX. These fees are based upon the Family Plan outlined in the
Taxpayer's golf and country club membership plan. The Annual
Membership Plan is renewable at the beginning of each year.
After maintaining a membership for five consecutive years, the

membership may be continued by paying monthly dues. If the
Participant selects the Regular Membership Plan, the Taxpayer
will collect and remit sales tax on the $XX initiation fee. If
Participant selects the Annual Membership Plan, the Taxpayer
will collect and remit sales tax each year based on that year's
annual fee. For example, if Participant selects the Annual
Membership Plan, the Taxpayer will charge the Participant the
annual fee plus sales tax. If the Participant continues under
the Annual Membership Plan in subsequent years, the Taxpayer
will again collect the annual fee and applicable sales tax.

ADVICE REQUESTED

Is sales tax due on the initiation fees and annual fees?

STATUTORY AND REGULATORY AUTHORITY

Section 212.04(1), F.S., states in part:

(1)(a) It is hereby declared to be the legislative intent
that every person is exercising a taxable privilege who
sells or receives anything of value by way of admissions.

(b) For the exercise of such privilege, a tax is levied at
the rate of 6 percent of sales price, or the actual value
received from such admissions, which 6 percent shall be
added to and collected with all such admissions from the
purchaser thereof, and such tax shall be paid for the
exercise of the privilege as defined in the preceding
paragraph....

Section 212.02(1), F.S., states:

(1) The term "admissions" means and includes the net sum of
money after deduction of any federal taxes for admitting a
person or vehicle or persons to any place of amusement,
sport, or recreation or for the privilege of entering or
staying in any place of amusement, sport, or recreation,
including, but not limited to, theaters, outdoor theaters,
shows, exhibitions, games, races, or any place where charge
is made by way of sale of tickets, gate charges, seat

charges, box charges, season pass charges, cover charges,
greens fees, participation fees, entrance fees, or other
fees or receipts of anything of value measured on an
admission or entrance or length of stay or seat box
accommodations in any place where there is any exhibition,
amusement, sport, or recreation, and all dues and fees paid
to private clubs and membership clubs providing
recreational or physical fitness facilities, including, but
not limited to, golf, tennis, swimming, yachting, boating,
athletic, exercise, and fitness facilities.... (Emphasis
supplied)

Section 212.06(1)(a), F.S., states:

(1)(a) The aforesaid tax at the rate of 6 percent of the
retail sales price as of the moment of sale, 6 percent of
the cost price as of the moment of purchase, or 6 percent
of the cost price as of the moment of commingling with the
general mass of property in this state, as the case may be,
shall be collectible from all dealers as herein defined on
the sale at retail, the use, the consumption, the
distribution, and the storage for use or consumption in
this state of tangible personal property or services
taxable under this part. The full amount of the tax on a
credit sale, installment sale, or sale made on any kind of
deferred payment plan shall be due at the moment of the
transaction in the same manner as on a cash sale....

Rule 12A-1.005, F.A.C., states in part:

(1) Every dealer is exercising a taxable privilege who
sells or receives anything of value by way of admissions
except those admissions which are specifically exempt.

(5)(d)1. Effective July 1, 1991, the following fees paid to
private clubs or membership clubs as a condition precedent
to, in conjunction with, or for the use of the club's
recreational or physical fitness facilities are subject to
tax.

a. Initiation fees when paid to equity or nonequity private

clubs and membership clubs....

e. Periodic payments required to be paid by members or any
payment required of a nonmember in order to use the club's
facilities.

Rule 12A-1.056(1), F.A.C., states in part:

(1) The total amount of tax on cash sales, credit sales,
installment sales, or sales made on any kind of deferred
payment plan shall be due at the moment of the transaction.

DETERMINATION

Here, both the initiation fees and annual fees are paid for
the use of the Club's facilities. Therefore, as Rule 12A1.005(5)(d)1.a., F.A.C., indicates the initiation fees are
taxable pursuant to Section 212.04, F.S. Similarly, as Rule
12A-1.005(5)(d)1.e., F.A.C. indicates, the annual fees are
taxable pursuant to Section 212.04, F.S. Pursuant to Section
212.06(1)(a), F.S., the initiation fees are taxable, in full,
when paid by the member at the time of joining, and the annual
fees are taxable when due each year.

This response constitutes a Technical Assistance Advisement
under Section 213.22, F.S., which is binding on the Department
only under the facts and circumstances described in the request
for this advise as specified in Section 213.22, F.S. Our
response is predicated on those facts and the specific situation
summarized above. You are advised that subsequent statutory or
administrative rule changes, or judicial interpretations of the
statutes or rules, upon which this advise is based, may subject
similar future transactions to a different treatment than
expressed in this response.

You are further advised that this response and your request
are public records under Chapter 119, F.S., which are subject to
disclosure to the public under the conditions of Section 213.22,
F.S. Your name, address, and any other details which might lead
to identification of the taxpayer must be deleted by the
Department before disclosure. In an effort to protect the

confidentiality of such information, we request you notify the
undersigned in writing within 15 days of any deletions you wish
made to the request or response.

Sincerely,

Charles Wallace
Senior Tax Specialist
Technical Assistance and Dispute Resolution

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