Can a member-owned private ski club avoid sales tax on members' ski lift passes by billing them separately from annual dues instead of bundling them together?

Plain-English summary

A member-owned, private, not-for-profit New York corporation owns and operates a ski area south of Buffalo. Members pay an initiation fee (representing ownership and voting rights) plus annual dues that currently cover both regular membership costs (newsletters, badges, the President's Ball) and members' use of the ski lifts and slopes. The club also sells lift passes to the general public, who can ski whenever the facility is open to members. The club wanted to restructure so members would pay for lift passes separately (at a discounted rate compared to non-members) rather than having lift access bundled into their annual dues, and asked whether that restructuring would make the members' lift-pass charges tax-exempt like similar charges already are for the general public.

The Department said no. New York's social/athletic club dues tax reaches not just formal "dues" but any charge to members for "social or sports privileges or facilities," and this club — member-owned, with voting members, offering discounted rates by virtue of membership, organized for the recreational purpose of skiing — squarely qualifies as a social or athletic club. Under that framework, it doesn't matter that a charge is labeled a separate "ski lift pass" fee rather than "dues," or that members pay only when they elect to use the lifts: the regulations specifically confirm that a club's charge to a member for using club athletic facilities, even on an as-used basis, still counts as taxable dues (paralleling a golf-course-use-fee example and a boat-docking-fee example in the regulations). Meanwhile, the exact same lift pass sold to a non-member stays exempt as a participatory-sporting-activity admission charge, since non-members aren't paying club dues at all — they're just buying a facility-use ticket. So the club's proposed restructuring doesn't change the tax result for its own members, even though it makes no difference for the general public.

What this means for you

Member-owned social or athletic clubs

You can't convert a member's use-of-facility charge into a tax-exempt admission fee just by unbundling it from formal "dues" and billing it separately. If your organization qualifies as a social or athletic club (membership control, voting rights, discounted member pricing, a social/athletic organizational purpose), any charge to members for facility use is taxable dues, regardless of how it's itemized or labeled.

Clubs that also sell facility access to the public

The same facility, same activity, and even the same price list can have different tax outcomes depending on who's paying: members pay the taxable club-dues rate, while non-members pay the tax-exempt participatory-sports admission rate for the identical lift ticket.

Accountants and tax professionals

This directly applies 20 NYCRR § 527.11(b)(2)(i)(c)'s broad "any charge for social or sports privileges or facilities" dues definition, following the golf-course (Example 5) and yacht-club-docking (Example 6) precedents in the same regulation, and confirms the prior TSB-H-81(12)S holding that member vs. non-member pricing for the identical facility use doesn't change the member side's taxable-dues characterization.

Common questions

Q: Can a ski club avoid tax on members' lift passes by billing them separately from dues?
A: No — any charge to a member for using the club's ski lifts and slopes counts as taxable dues regardless of how it's itemized or billed separately from regular annual dues.

Q: Are ski lift passes sold to non-members taxable?
A: No — non-members aren't paying club dues; their lift-pass charge is an exempt participatory-sports admission charge.

Q: What makes this ski corporation a "social or athletic club" for tax purposes?
A: It's member-owned with voting rights, offers discounted pricing by virtue of membership, and was formed for the recreational (skiing) purpose — factors the regulations treat as indicating club status.

Q: Does it matter that members only pay for the lift pass when they choose to ski?
A: No — the regulations specifically confirm that a charge triggered by a member's election to use club athletic facilities is still taxable dues.

Q: Can another club rely on this exact restructuring analysis?
A: No. This opinion binds the Department only for this petitioner's specific facts and can't be relied on by another taxpayer.

Citations and references

Statutes and regulations:

• Tax Law § 1101(d)(6), (13) (dues; social or athletic club)
• Tax Law § 1105(f)(1) (participatory sports admission exclusion)
• Tax Law § 1105(f)(2)(i) (club dues/initiation fee tax)
• 20 NYCRR § 527.10(d)(4) (participatory sports exclusion, incl. Example 7)
• 20 NYCRR § 527.11 (club dues, incl. Example 5, Example 6, Example 29)

Prior opinions cited:

• TSB-H-81(12)S, Matter of N.R.C. Realty Corporation, Nov. 28, 1980

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2002.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a02_8s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-02(8)S
Sales Tax
May 31, 2002

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S010221B

On February 21, 2001, the Department of Taxation and Finance received a Petition for
Advisory Opinion from William R. Jehle, 35 DeVille Circle, Williamsville, New York, 14221-4408.
Petitioner, William R. Jehle, provided additional information pertaining to the Petition on April 24,
2001 and on August 28, 2001.
The issue raised by Petitioner, William R. Jehle, is whether separate charges by a private ski
club for annual, daily or hourly ski lift passes which entitles holders to the use of ski lifts on the
club’s slopes and trails are subject to the sales tax imposed upon dues paid by members to a social
or athletic club.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Petitioner is an officer of a member owned, private, not-for-profit, New York State
corporation (Corporation) which owns and operates a ski area south of Buffalo, NY. To join its
private club, Corporation charges an initiation fee which represents ownership of the club's facilities
and carries corporate voting rights. Corporation also charges annual dues for its members to
maintain their membership, pay for newsletter mailings, administrative costs, badges, and private
club functions such as the annual President’s ball. Currently, the annual dues charged to members
also pay for members’ use of the ski lifts and skiing on the club’s slopes and trails. The Corporation
also assesses members for capital improvements. The assessments must be approved by the voting
membership.
Corporation’s skiing facilities are open to the public at all times that they are available to
members. The public may purchase an annual lift pass, or a daily or hourly pass, for the use of the
skiing facilities. Corporation may also provide a “package” of various passes. The members who
own the private club may use the club’s facilities for private functions at no charge when there is
no skiing. Corporation currently collects 8% sales taxes on charges for initiation fees and dues. It
does not collect tax on non-member ski lift passes.
Corporation would like to re-structure its dues and fee charges as follows:
•

Initiation fees (which represent ownership of the club's real property and facilities and carry
voting rights, etc., in Corporation) would continue to be charged in the current manner.

•

Members would still be subject to annual dues to maintain their membership in Corporation,
pay for newsletter mailing and administrative costs, badges, and private club functions such
as the annual President's Ball.

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•

Members’ use of the club’s ski lifts and slopes and trails, which are currently included in the
charge for annual dues, would be charged separately as an annual, daily or hourly ski lift
pass, or as a package of various passes. As described above, non-members would also be
able to purchase annual, daily or hourly ski lift passes, and packages. Members would be
entitled to discounts on the ski lift passes and any other activities that are open to the public.

•

Assessments for capital improvements (which must be approved by the voting membership)
will still be charged to members.

Applicable Law and Regulations
Section 1101(d) of the Tax Law provides, in part:
When used in this article for purposes of the tax imposed under subdivision
(f) of section eleven hundred five, the following terms shall mean:
*

*

*

(6) Dues. Any dues or membership fee including any assessment,
irrespective of the purpose for which made, and any charges for social or sports
privileges or facilities, except charges for sports privileges or facilities offered to
members’ guests which would otherwise be exempt if paid directly by such guests.
(Emphasis added)
*

*

*

(13) Social or athletic club. Any club or organization of which a material
purpose or activity is social or athletic.
Section 1105(f) of the Tax Law imposes the sales tax, in part, upon:
(1) Any admission charge where such admission charge is in excess of ten
cents to or for the use of any place of amusement in the state . . . . except charges to
a patron for admission to, or use of, facilities for sporting activities in which such
patron is to be a participant. . . . (Emphasis added)
*

*

*

(2)(i) The dues paid to any social or athletic club in this state if the dues of
an active annual member, exclusive of the initiation fee, are in excess of ten dollars
per year, and on the initiation fee alone, regardless of the amount of dues, if such
initiation fee is in excess of ten dollars. Where the tax on dues applies to any such

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social or athletic club, the tax shall be paid by all members, other than honorary
members, thereof regardless of the amount of their dues, and shall be paid on all
dues or initiation fees for a period commencing on or after August first, nineteen
hundred sixty-five. . . .
Section 527.10(d)(4) of the Sales and Use Tax Regulations provides, in part:
Charges to a patron to or for the use of sporting facilities or activities in
which the patron is to be a participant are excluded from tax.
*

*

*

Example 7: A ski resort's charge for lift tickets is an exempt admission
charge to a sporting facility in which the patron will be a participant. If the
facility charges for the use of skis or other equipment, such charge is for the
rental of tangible personal property which is subject to tax.
Section 527.11 of the Sales and Use Tax Regulations provides, in part:
(a) Imposition. (1) A tax is imposed upon the dues paid to any social or
athletic club in this State if the dues of an active annual member, exclusive of the
initiation fee, are in excess of $10 per year.
(2) A tax is imposed on the initiation fee paid to any social or athletic club,
regardless of the amount of dues, if such initiation fee is in excess of $10.
*

*

*

(b) Definitions. As used in this section, the following terms shall mean:
*

*

*

(2) Dues. (i) The term dues includes:
(a) any dues or membership fee;
(b) any assessment, irrespective of the purpose for which made; and
(c) any charge for social or sports privileges or facilities. (Emphasis added)
*

*

*

Example 5: A social club collects $10 per year from each of its members as
regular dues. Members are entitled to use the clubhouse facilities without
payment of an additional charge. However, members who wish to use the

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golf course may do so only upon payment of an additional charge. Since the
golf course is a social or athletic club facility, any charge made by the club
to a member for the use of the course constitutes dues. The fact that such
charges are made upon the member's election to use the course is immaterial.
Example 6: A club organized and operated for the promotion of yachting and
other aquatic sports, which is a social and athletic club, owns and maintains
docking and mooring facilities for the use of its members. The club makes
a charge to each member using its facilities. The amount of the charge
depends upon the size of the member's boat and the location of the docking
and mooring facilities used. The charges made by the club for these facilities
constitute taxable dues or membership fees.
*

*

*

(5) Club or organization.
(i) The phrase club or organization means any entity which is composed of
persons associated for a common objective or common activities. Whether the
organization is a membership corporation or association or business corporation or
other legal type of organization is not relevant. Significant factors, any one of which
may indicate that an entity is a club or organization, are: an organizational structure
under which the membership controls social or athletic activities, tournaments,
dances, elections, committees, participation in the selection of members and
management of the club or organization, or possession by the members of a
proprietary interest in the organization. The organizational structure may be formal
or informal.
*

*

*

(7) Athletic club. (i) An athletic club is any club or organization which has
as a material purpose or activity the practice, participation in or promotion of any
sports or athletics.
Example 29: Tennis, golf and boxing clubs, athletic or sports boating clubs,
and any other organization for the practice or promotion of athletics or
sports, are included within the meaning of athletic club or organization.
Opinion
Corporation proposes to restructure its dues and fee charges in order to permit members to
purchase annual, daily or hourly ski lift passes separately from their regular annual club dues, in the

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same manner as non-members of Corporation. Charges for annual, daily or hourly ski lift passes,
and packages of such passes, would be lower for members than for non-members.
Corporation is a member owned, private, not-for-profit, New York State corporation.
Members have voting rights in Corporation’s management and activities. Members may purchase
ski lift passes at a lower price than that available to non-members by virtue of their membership in
the club. These factors indicate that Corporation is a club for purposes of Section 1105(f)(2)(i) of
the Tax Law. See Section 527.11(b)(5)(i) of the Sales and Use Tax Regulations. Given the
recreational purposes for which Corporation was formed, Corporation is a social or athletic club for
purposes of Section 1105(f)(2)(i) of the Tax Law. See Section 527.11(b)(7) of the Sales and Use
Tax Regulations. Therefore, the dues paid by members for membership in Corporation are subject
to sales tax under Section 1105(f)(2)(i) of the Tax Law. Such dues include annual dues or
membership fees in excess of $10.00 per year, any assessment, irrespective of the purpose for which
made, and any charge to members for social or sports privileges or facilities. See Section
1101(d)(6) of the Tax Law and Section 527.11(b)(2)(i)(c) of the Sales and Use Tax Regulations.
Therefore, charges for annual, daily or hourly ski lift passes sold to Corporation’s members are
considered to be dues under Section 1101(d)(6) of the Tax Law and such charges are subject to sales
tax under Section 1105(f)(2)(i)of the Tax Law.
It should be noted that charges to non-members for admission to, or use of, facilities for
sporting activities in which such non-member is to be a participant are not subject to sales tax. See
Section 1105(f)(1) of the Tax Law and Section 527.10(d)(4) of the Sales and Use Tax Regulations.
Corporation’s charges to members for ski lift passes are taxable, however, regardless of the fact that
similar charges to non-members are excluded from the tax. See Matter of N.R.C. Realty
Corporation, State Tax Commission, November 28, 1980, TSB-H-81(12)S.
Accordingly, the dues restructuring plan proposed by Corporation does not result in a
nontaxable charge to Corporation’s members for ski lift passes.

DATED: May 31, 2002

NOTE:

/s/
Jonathan Pessen
Tax Regulation Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.