Can a sportsmen's club buy the clay targets it uses for members' trap and skeet shooting tax-free for resale, since it charges members taxable fees to shoot?

Plain-English summary

Camillus Sportsmen's Club, Inc. is a social or athletic club (Tax Law § 1101(d)(13)). It already collects sales tax on the fees members pay to use its facilities for shooting events and target practice, because those fees are taxable "dues" (20 NYCRR § 527.11(b)(2)) — and it charges no tax when a member pays for a guest. Since a shooting fee lets the member or guest use a number of machine-propelled clay targets, the club asked whether it could buy those clay targets tax-free for resale.

The Department held: no — the clay targets are taxable to the club.

• What "retail sale" means. Under Tax Law § 1105(a) and § 1101(b)(4)(i), a retail sale is a sale of tangible personal property for any purpose other than resale as such (or use in providing certain specified services).
• The targets are consumed supplies, not resold. The clay targets are a supply item consumed by the club's trap machines — bought for the club's own use in providing sporting facilities, not for resale, and providing those facilities isn't one of the § 1101(b)(4)(i) exceptions.
• Result. The club's clay-target purchases are retail sales to the club, and its supplier must collect state and local sales tax (Matter of The Tonawandas Sportsmen's Club, TSB-H-87(14)S).

What this means for you

Charging your members taxable fees doesn't make your supplies resale-exempt. A club can owe tax at both ends: it collects tax on the fees/dues members pay, and it pays tax on the supplies it consumes to provide the activity. The resale exemption only applies when you actually resell the item to the customer — not when you use it up delivering a service.

Consumables you burn through providing the facility are taxable to you. Clay targets loaded into trap machines are like other consumed supplies: the club is the end user, so the supplier charges the club tax.

Know which side of the line your purchases fall on. Items you hand over to a member as their property may be resale-eligible; items your equipment consumes to run the activity generally are not.

Common questions

Q: We charge members taxable fees to shoot. Can we buy the clay targets tax-free for resale?
A: No. The targets are consumed by your trap machines to provide the shooting facility — that's your own use, not a resale — so you pay sales tax on the targets.

Q: We already collect tax on member shooting fees. Isn't taxing the targets double taxation?
A: New York treats them as separate transactions: taxable dues/fees from members, and a taxable retail purchase of the consumed supplies by the club. The resale exemption doesn't reach supplies you consume.

Q: When would a club's purchase actually be resale-exempt?
A: When the club buys tangible property to resell it as such to members, rather than to consume it in providing a service.

Citations and references

Statute, regulation, and authority:

• Tax Law § 1105(a) — imposes sales tax on receipts from every retail sale of tangible personal property
• Tax Law § 1101(b)(4)(i) — defines "retail sale" (a sale for any purpose other than resale as such or use in providing certain specified services) and provides the resale exclusion
• Tax Law § 1101(d)(13) — defines "social or athletic club"
• 20 NYCRR § 527.11(b)(2) — treats members' club use fees as taxable dues (with no tax on fees a member pays for a guest)
• Matter of The Tonawandas Sportsmen's Club, TSB-H-87(14)S — clay targets consumed by trap machines are taxable retail purchases by the club

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1988.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a88_25s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-88(25)S
Sales Tax
April 25, 1988

Taxpayer Services Division
Technical Services Bureau

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S880111A

On January 11, 1988, a Petition for Advisory Opinion was received from Camillus
Sportsmen's Club, Inc., Devoe Rd., Camillus, New York 13203.
The issue raised is whether Petitioner's purchases of clay targets for use in trap and skeet
shooting events are subject to tax.
Aware of its tax status as "social or athletic club" as defined in Tax Law § 1101(d)(13),
Petitioner collects sales tax on the fees charged members for the use of club facilities for shooting
events and target practice, because such fees represent taxable "dues" pursuant to 20 NYCRR
527.11(b)(2). In accordance with the same regulation, no tax is charged when these fees are paid by
members for their guests.
Since payment of a shooting fee entitles the member or guest to the consumption of a number
of machine propelled clay targets, Petitioner inquires whether the club's purchases of these supplies
qualify for the resale exemption.
The Tax Law imposes a tax on the receipts from every retail sale of tangible personal
property and defines "retail sale" as a sale of tangible personal property to any person for any purpose
other than for resale as such or for use in providing certain specified services. Tax Law § l105(a);
§ 1101(b)(4)(i).
The clay targets are a supply item consumed by Petitioner's trap machines. As such they are
not purchased for resale but for the club's use in providing sporting facilities to members, a service
not covered by the exceptions contained in Section 1101(b)(4)(i) of the Tax Law.
Accordingly, purchases of clay targets are retail sales to the Petitioner whose supplier must
collect the applicable State and local sales taxes. Matter of The Tonawandas Sportsmen's Club,
Decision of the State Tax Commission, Nov. 14, 1986, TSB-H-87(14)S.

DATED: April 25, 1988

s/FRANK J. PUCCIA
Director
Technical Services Bureau

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

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR