How did SC PLR 91-5 compute admissions tax on the joint XYZ Club membership, and which club had to remit it?

Plain-English summary

South Carolina Private Letter Ruling 91-5 calculated the historical admissions-tax base for a shared membership between ABC Country Club and B Club.

Members paid $175 per month for XYZ Club access. ABC offered golf, tennis, swimming, and a clubhouse; B Club offered dining only. The tax base depended on the member's home club and whether dues were paid before or after April 1, 1992.

ABC Country Club—not B Club or the jointly named XYZ Club—was responsible for collecting and remitting the admissions tax for all XYZ members.

The joint membership arrangement

For an ABC member, ABC collected $175, retained $147.50, and sent $27.50 to B Club.

For a B Club member, B Club collected $175, retained $55, and sent $120 to ABC.

Before formation of XYZ, ABC taxed dues associated with athletic and recreational facilities but excluded a bona fide social-membership portion. B Club's dining-club dues were not subject to admissions tax.

Dues paid before April 1, 1992

The prior policy excluded true social dues when the member received only clubhouse and social access without discounts or privileges for athletic facilities. It also excluded the B Club dining portion.

For an ABC member:

• XYZ dues: $175.00
• less B Club payment: $27.50
• less ABC social dues: $45.00
• taxable amount: $102.50

For a B Club member:

• XYZ dues: $175.00
• less B Club dining portion: $55.00
• less ABC social dues: $45.00
• taxable amount: $75.00

Dues paid on or after April 1, 1992

Revenue Ruling 91-18 changed the country-club policy. Social dues paid to a for-profit country club became taxable, and the full club portion associated with golf, tennis, swimming, and other memberships was taxed rather than only the amount above social dues. The for-profit dining-club policy did not change.

For an ABC member:

• XYZ dues: $175.00
• less B Club dining payment: $27.50
• taxable amount: $147.50

For a B Club member:

• XYZ dues: $175.00
• less B Club dining portion: $55.00
• taxable amount: $120.00

Who collected and remitted the tax

Section 12-21-2420 placed the tax on the person paying the admission price and required the person collecting that price to collect and remit it.

The PLR assigned that responsibility to ABC Country Club for every XYZ member, including members whose $175 payment initially went to B Club.

What this means for you

Clubs reviewing this historical arrangement

Separate the dining-club portion from the country-club portion, then apply the policy in effect when the dues were paid. The ruling used the payment date, not merely the membership period.

Current golf clubs

Do not apply this 1991 PLR as current law. RR 24-4 later modified its treatment for qualifying golf-club monthly and annual dues paid on or after May 13, 2024.

Other taxpayers

The exact dollar allocation applied only to the three-club arrangement and payment flows described in the PLR.

Common questions

Q: Were B Club dining dues taxable?

A: No. The PLR said the Commission's for-profit dining-club policy remained unchanged.

Q: Why did the taxable amount increase on April 1, 1992?

A: The ABC social-membership portion became subject to admissions tax under RR 91-18.

Q: How much of an ABC member's $175 was taxable before April 1, 1992?

A: $102.50.

Q: How much was taxable afterward?

A: $147.50 for an ABC member and $120 for a B Club member.

Q: Which club remitted the tax?

A: ABC Country Club for all XYZ members.

Citations and references

• S.C. Code Ann. § 12-21-2420 — historical admissions tax and collection duty
• SC Revenue Ruling 91-18 — historical country-club policy applied by the PLR
• SC Revenue Ruling 24-4 — later modification for qualifying golf-club dues: https://dor.sc.gov/sites/dor/files/policies/RR24-4.pdf

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/PLR91-5.pdf

Original ruling text

SC PRIVATE LETTER RULING #91-5

TO:

X Management

TAX ANALYST:

Deana West

SUBJECT:

ABC Country Club
(Admissions Tax)

REFERENCE:

S. C. Code Ann. Section 12-21-2420 (Supp. 1990)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Enacted June 1991)
SC Revenue Procedure #87-3

SCOPE:

A Private Letter Ruling is a temporary document issued to a taxpayer, upon
request, and it applies only to the specific facts or circumstances related in
the request.
Private Letter Rulings have no precedential value and may not be relied
upon by anyone other than the taxpayer to whom it is issued.

Questions:
1.

What portion of the membership fees paid to the XYZ Club is included in the measure of
the admissions tax?

2.

Is ABC Country Club, B Club or XYZ Club responsible for collecting the admissions
tax?

Facts:
ABC Country Club (ABC) and B Club are for-profit clubs that have recently formed the XYZ
Club (XYZ) in order to allow their respective members to share the facilities of both clubs. The
facilities at ABC include golf, tennis, swimming and a clubhouse. The B Club only has dining
facilities.
Currently, XYZ membership dues are $175.00 per month. Upon application for membership to
XYZ, ABC members pay $175.00 to ABC and B Club members also pay $175.00 to the B Club.
For each of its' XYZ members, ABC retains $147.50 and remits the remaining $27.50 to the B

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Club. For each of its' XYZ members, the B Club retains $55.00 and forwards the $120.00
balance to ABC.
Prior to the formation of XYZ, ABC members were paying admissions tax on the dues which
relate to the use of athletic or recreational facilities, while dues for social facilities such as the
clubhouse were not taxed. Full memberships, entitled to use all of the facilities, were taxed on
the incremental charge in excess of a social membership. B Club members were not paying
admission tax for use of the dining facilities.
X Management is requesting advice to determine the proper measure of the admissions tax and
the party who must remit the tax, with respect to memberships to the XYZ Club.
Discussion:
1.

The first issue involves determining what amount of membership fees are included in the
measure of the admissions tax. The Tax Commission's policy regarding this issue will
change effective April 1992, therefore, in addressing this question, it is necessary to
discuss the Commission's present and future policy.

Code Section 12-21-2420 imposes the admissions tax and reads, in part:
There shall be levied, assessed, collected and paid upon all paid admissions to all places
of amusement within this State a license tax of...four percent...
During the past legislative session, the General Assembly amended Code Section 12-21-2420, as
stated above, to increase the admissions tax from 4% to 5% effective February 1, 1992.
Policy Prior to April 1, 1992
The Commission has consistently imposed the admissions tax on membership fees. This
position was upheld in Commission Decision L-D-31, dated November 28, 1973, which
provided:
...separate charges made by a profit organization for the use of a golf course and swimming pool
which the corporation owns and operates are admissions to places of amusement and are
taxable.... We are here of the opinion, however, that the charges for social membership in the
club are not taxable admission charges. All other charges for the use of the club facilities are in
our opinion taxable admissions tax charges...
The Tax Commission's Audit Manual provides an example of how to calculate the tax due on
membership golf courses and country clubs in accordance with Commission policy as set forth in
the above discussion. The manual states that social membership dues "are not subject to
admissions tax only if the social member is entitled exclusively to the use of the clubhouse,
lounge and any social gatherings held at the club. Social members may not receive any discount
or privileges for the use of a golf course, swimming pool and/or tennis courts". The manual
provides the following example:

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Membership

Cost/Month

1. Full family
2. Golf
3. Tennis
4. Pool
5. Racquetball
6. Social

$100
50
35
15
10
20

Social Portion
$20
20
20
20% or $3
20% or $2
-

Taxable Portion
$80
30
15
12
8
0

In this example, the social members are bona-fide "social members" who do not receive
additional membership benefits or discounts. Therefore, the social dues are exempt from the
admissions tax. The $20 social portion is deducted from the full family, golf, and tennis
memberships to arrive at a taxable portion for each. In the case of the pool and racquetball
memberships where the social dues are more expensive, a percentage (20%) based on a ratio of
social dues to the top of the line membership (full family) is used.
In reviewing the above discussion regarding the Commission's admissions tax policy prior to
April 1, 1992, it may be summarized that the admissions tax is imposed on (1) a for-profit
country clubs membership dues that are in excess of social membership dues; (2) certain other
separate charges, such as green fees and court fees; and (3) the cover charges and other charges
for the right to enter special events or parties. The admissions tax is not imposed upon the
membership dues of a bona-fide social member of a for-profit country club and members of a
for-profit dining club.
Policy As of April 1, 1992
South Carolina Revenue Ruling #91-18 addressed the imposition of the admissions tax on social
membership dues paid to a for-profit country club and concluded the following:
Membership dues paid to a for-profit country club that allows social members discounts or
privileges for the use of the other club facilities are subject to the admissions tax for all
periods open under statute. Effective April 1, 1992, all other social membership dues paid
to a for-profit country club are subject to the admissions tax.
All other types of memberships to a for-profit country club, such as golf, tennis and
swimming memberships, are no longer taxed only on the membership dues exceeding the
social portion of the dues. Instead, the entire amount of these membership dues are subject
to the admissions tax, effective April 1, 1992.
Additionally, it should be noted that the Commission's policy with respect to for-profit dining
clubs has not changed. Membership dues paid to a for-profit dining club, therefore, are not
subject to the admissions tax.
2.

The second issue concerns identifying the person who is liable for remittance of the
admissions tax collected and is addressed by Code Section 12-21-2420 which reads in
part as follows:

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The tax imposed by this section shall be paid by the person or persons paying such
admission price and shall be collected and remitted to the South Carolina Tax
Commission by the person or persons collecting such admission price.
Conclusion:
1.

Membership fees paid to the XYZ Club are subject to the admissions tax. The amount of
membership fees subject to the admissions tax is determined by the date the membership
dues are paid and is calculated as follows:
ABC COUNTRY CLUB MEMBERS JOINING THE XYZ CLUB

Membership Fees Payment Date:
Before 4/1/92
XYZ Club Dues
Less: Payment to B Club
Social Dues to ABC Country Club

On or After 4/1/92

$175.00
27.50
45.00
------$102.50

Taxable Membership Fees

$175.00
27.50
0.00
------$147.50

B CLUB MEMBERS JOINING THE XYZ CLUB
Membership Fees Payment Date:
Before 4/1/92
XYZ Club Dues
Less: Payment to B Club
Social Dues to ABC Country Club

$175.00
55.00
0.00
------$ 75.00

45.00

Taxable Membership Fees
2.

On or After 4/1/92
$175.00
55.00
------$120.00

Pursuant to Code Section 12-21-2420, ABC Country Club is responsible for collecting and
remitting the admissions tax for all members of the XYZ Club.

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