Were a country club's initiation fees and monthly dues exempt when its amusement services were provided exclusively in a Recorded Texas Historic Landmark?

Plain-English summary

The requester asked whether a country club in a building designated as a Recorded Texas Historic Landmark had to collect sales tax on amusement-service charges such as initiation fees and monthly dues.

The Comptroller answered no. The letter explained that the Legislature had extended sales tax to amusement services provided by previously excluded Section 501(c)(7) organizations, but had retained the exclusion for amusement services provided exclusively in a place designated as a Recorded Texas Historic Landmark by the Texas Historical Commission.

The exclusion therefore continued to cover the country club's amusement services when they were provided exclusively in that designated place.

What this means for you

The location condition was central to the answer. This letter did not announce a general exemption for all country-club dues; it addressed amusement services provided exclusively within the qualifying historic landmark.

Common questions

Were the initiation fees and monthly dues taxable? No on the stated facts. Why? The historic-landmark exclusion survived the broader extension of tax to Section 501(c)(7) amusement services. Would services outside the landmark receive the same treatment? The letter did not decide that; its answer repeatedly used the word "exclusively."

Citations and references

• Texas Tax Code Section 151.3101(a)(2)(A)
• House Bill 11

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9201L1151D08

Original ruling text

January 9, 1992

Dear **:

Thank you for your letter, which Tom Soto recently transferred to
me for reply. You pointed out the following:

Section 151.3101 (a)(2)(A) of the Sales and Use Tax law as amended
by House Bill 11 states that Amusement services are exempted from
the taxes imposed by this chapter only if exclusively provided in
a place that is designated as a Recorded Texas Historic Landmark
by the Texas Historical Commission.

Question: If a country club is located within a building that is
designated as a Recorded Texas Historic Landmark by the Texas
Historical Commission, are they exempt from collecting sales tax on
their charges for amusement services such as initiation fees and
monthly dues?

Answer: Yes. Although the Legislature extended the sales tax to
cover amusement services provided by the previously excluded 501
(c)(7) organizations, it left intact the exclusion for amusement
services exclusively provided in a place that is designated as a
Recorded Texas Historic Landmark by the Texas Historical Commission.
This exclusion continues to apply to amusement services provided by
a country club exclusively in such a place.

This opinion is based on the facts presented. Different facts,
though similar, might lead to different answers. If you have further
questions, feel free to write or call me at 1-800-252-5555,
ext. 3-3889.

Sincerely,

John Christian
Attorney
Tax Administration Division