Are annual membership fees for a public pistol range, and separate fees for its firearm safety course, subject to New York sales and use tax?

Subject

Whether fees paid to Petitioner for membership in Petitioner and for firearm safety courses offered by Petitioner are subject to sales and use taxes.

What this means for you

A pistol range charges an annual membership fee for unlimited use of its indoor range, open to the general public with no restrictions and no member control over the business's management. It also offers an NRA-certified firearm safety course (helping people get pistol permits or build firearm-handling skills), which can be purchased on its own -- with a credit toward membership if someone later joins after taking the course. The range hosts no social activities.

New York taxes dues paid to a "social or athletic club," but the regulation's own test looks at whether MEMBERS control social/athletic activities, elections, or hold a proprietary interest -- none of which is true here, since membership is unrestricted, open to the public, and members have zero say in management. Following a 1983 precedent (Manhattan Plaza Associates) with essentially the same fact pattern for a health club, this opinion concludes members here are really just customers of a business, not members of a taxable "club or organization," so the membership fee escapes the club-dues tax. Separately, providing a firearm safety course isn't one of the specific services New York's sales tax law enumerates as taxable, so the course fee escapes tax on that independent basis too.

Q&A

Q: We run a recreational facility (range, gym, etc.) that's open to the public with no member control over how we operate it -- are our membership fees taxable club dues?
A: No, per this opinion -- since membership is unrestricted, open to the public, and members have no proprietary interest or management control, the business isn't a "social or athletic club" under Tax Law § 1105(f)(2) and 20 NYCRR § 527.11(b)(5), so the fees aren't taxable dues.

Q: We charge separately for an instructional/safety course (unrelated to membership) -- is that taxable?
A: No, per this opinion -- providing an instructional course like a firearm safety class isn't one of the services specifically enumerated as taxable under Tax Law § 1105(c), so the course fee itself escapes sales tax.

Q: If someone takes our course first and later decides to join as a member, does crediting the course fee toward membership change either answer?
A: This opinion doesn't suggest it does -- both the membership fee and the course fee are independently non-taxable on these facts, so the crediting arrangement between them doesn't create a tax issue.

Citations

• Tax Law § 1105(c) -- imposes tax only on specifically enumerated services; instructional/safety courses aren't among them.
• Tax Law § 1105(f)(2) -- imposes sales tax on dues paid to a social or athletic club in New York.
• 20 NYCRR § 527.11(b)(5) -- defines "club or organization" based on member control over activities/management/proprietary interest, with examples (13 and 14) of facility-access businesses that are NOT taxable clubs.
• Matter of Manhattan Plaza Associates, Adv. Op. St. Tax Comm'n, August 31, 1983, TSB-A-83(34)S -- prior opinion holding a similar open-to-the-public health club with no member control was not a "social or athletic club"; followed here.

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1994.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a94_9s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-94 (9)S
Sales Tax
March 10, 1994

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S940105A

On January 5, 1994, a Petition for Advisory Opinion was received from Mount Vernon
Shooting Center, Inc., 172-4 Gramatan Avenue, Mount Vernon, New York 10550.
The issues raised by Petitioner, Mount Vernon Shooting Center, Inc., are whether fees paid
to Petitioner for membership in Petitioner and for firearm safety courses offered by Petitioner are
subject to sales and use taxes.
Petitioner is the owner and operator of a pistol range. For the payment of an annual fee,
members are entitled to unlimited use of Petitioner's indoor pistol range for one year. All members
are eligible to use the indoor pistol range and to participate in firearm safety courses offered by
Petitioner. Membership is not restricted and is available to the general public. In addition, the
membership of Petitioner possess no proprietary rights in Petitioner and have no control over its
activities and management. Petitioner does not engage in any social activities.
Petitioner provides a firearm safety course which assists individuals in obtaining pistol
permits and/or developing skills in handling firearms for recreation, home protection and/or
employment. The course is given by a certified NRA instructor and follows the guidelines of the
NRA Firearms Safety Course. Individuals are shown range safety, shoot selected firearms for
instructors and must demonstrate that he or she qualifies in the safe handling of a handgun. At the
individual's option, he or she can further his or her skills, during his or her annual period, by
continuing to use the range, which maintains a NRA instructor on the premises acting as a range
officer.
The firearm safety course may be purchased separately from membership in Petitioner.
However, participants in the safety course who subsequently join Petitioner are given a credit for the
fee paid for the safety course.
Section 1105(c) of the Tax Law imposes tax upon the receipts from every sale, except for
resale, of certain enumerated services. The providing by Petitioner of a firearm safety course is not
one of the services enumerated under Section 1105(c) of the Tax Law and, therefore, such service
is not subject to sales and use taxes.
Section 1105(f)(2) of the Tax Law imposes sales tax upon the following:
(2)
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...

-2­
TSB-A-94 (9)S
Sales Tax
March 10, 1994
Section 527.11(b)(5) of the Sales and Use Tax Regulations provides, in part, as follows:
(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 control
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.
(ii)

A "club or organization" does not exist merely because a business

entity:
(a)
charges for the use of facilities on an annual or seasonal basis even if
an annual or season pass is the only method of sale and provided such passes are sold
on a first-come, first-served basis.
(b)
restricts the size of the membership solely because of the physical size
of the facility. Any other type of restriction may be viewed as an attempt at
exclusivity.
(c)

uses the word "club" or "member" as a marketing device.

(d)
offers tournaments, leagues and social activities which are controlled
solely by the management.
*

*

*

Example 13: A tennis "club" which is owned by an individual provides
tennis courts, showers, a sauna and lockers. "Members" pay a seasonal fee to play
tennis at a certain time weekly. The "club" provides no other services and has a daily
rate for non-members who may use a court when there is free time. This "club" is not
a "club or organization".
Example 14: A tennis "club" which is owned by an individual provides
tennis courts, showers, a sauna and lockers. Members pay a seasonal fee to play
tennis, any time during the season, without limitation. The club provides no other
services and has a daily rate for non-members. Since the "club" does not restrict
playing to members only and the "club" provides nothing but playing time for its
members, charges are for season tickets to play tennis and not for the payment of
dues. Therefore, this is not a "club or organization".

-3­
TSB-A-94 (9)S
Sales Tax
March 10, 1994
In Manhattan Plaza Associates, Adv Op St Tx Comm, August 31, 1983, TSB-A-83(34)S the
Tax Commission held that a owner/operated health club which made available facilities for its
members and their guests, where membership was open to the public, the club carried on no social
or athletic events, tournaments or dances, members possessed no proprietary interest in the club and
had no control over either club membership or club activities was not a "club or organization" but
members in reality were mere customers of a business entity. Therefore, payments made to club did
not constitute "dues" subject to tax under Section 1105(f)(2) of the Tax Law.
Accordingly, in the instant case since members in Petitioner possess no proprietary rights in
Petitioner and have no control over its activities or management, membership in Petitioner is not
restricted, but rather is open to the public and Petitioner does not engage in any social activities,
pursuant to Section 527.11(b)(5) of the Sales and Use Tax Regulations and Manhattan Plaza
Associates, supra, Petitioner is not a "social or athletic club" within the meaning of Section
1105(f)(2) of the Tax Law. Moreover, the providing of a firearm safety course is not an enumerated
service subject to sales tax pursuant to Section 1105(c) of the Tax Law. Therefore, fees paid to
Petitioner by individuals for membership in Petitioner and for the firearm safety course are not
subject to sales and use taxes.

DATED: March 10, 1994

/s/
PAUL B. COBURN
Deputy Director
Taxpayer Services Division

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