Does a country club housed in a building bearing a Texas Historical Commission marker qualify for the sales tax exemption on amusement services (dues/initiation fees) available to a Recorded Texas Historic Landmark?

Plain-English summary

A 501(c)(7) nonprofit country club, housed in a building bearing a Texas Historical Commission ("THC") marker (titled after the historic home and ranch it depicts, applied for in 1979), asked whether its monthly dues and initiation fees -- taxable amusement services -- qualify for a sales tax exemption because of that marker.

The Comptroller ruled the club does NOT qualify. Rule 3.298(g)(1)(F) exempts amusement services provided exclusively in a place designated as a "Recorded Texas Historic Landmark" (RTHL) by the THC. The Comptroller checked directly with the THC's Local History Section and confirmed a "Texas Historical Marker" is a distinct, lesser designation from an RTHL: modifying or remodeling a building that carries the RTHL designation requires prior THC approval, while a building with only a Historical Marker can be remodeled without any THC involvement -- and a Historical Marker never itself reflects (or substitutes for) an RTHL designation. Because this club's building has only the marker, not the RTHL status, its dues and fees remain taxable.

What this means for you

Country clubs and membership organizations in historically marked buildings

Having a Texas Historical Marker on your building does NOT automatically qualify your amusement services (dues, initiation fees) for the historic-landmark sales tax exemption. Confirm your building specifically holds the RTHL designation -- a materially stricter status requiring THC approval for any remodeling -- before assuming this exemption applies.

Owners of historically significant buildings hosting taxable amusement services

Check with the Texas Historical Commission directly about which designation your property actually holds; "historical marker" and "Recorded Texas Historic Landmark" sound similar but carry very different legal consequences, both for tax exemptions and for your ability to remodel without THC sign-off.

Accountants and tax professionals

This letter is a useful reminder that exemption language referencing a specific official designation (here, "Recorded Texas Historic Landmark") should be verified against the issuing agency's own records rather than assumed from a colloquially similar-sounding marker or plaque.

Common questions

Q: Does a Texas Historical Marker on a building qualify it for the amusement-services historic-landmark tax exemption?
A: No, per this letter -- only the distinct "Recorded Texas Historic Landmark" designation qualifies, and a Historical Marker is not the same thing.

Q: How can you tell the difference between a Historical Marker and an RTHL designation?
A: Per this letter, an RTHL-designated building requires THC approval before any remodeling, while a building with only a Historical Marker does not -- and a Historical Marker will never reflect an RTHL designation.

Q: Are a country club's dues and initiation fees generally taxable in Texas?
A: Yes, as amusement services, unless a specific exemption (like the RTHL exemption, which didn't apply here) applies.

Citations and references

Rules:

• 34 Tex. Admin. Code Rule 3.298(g)(1)(F) (amusement services exemption for a Recorded Texas Historic Landmark)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9706507L

Original ruling text

June 12, 1997

This is in response to your request for a ruling on the possible exemption from
tax on amusement services (monthly dues and initiation fees) at a country club
operated by your client. The club is a 501(c)(7) nonprofit organization that
is located in a building that has a Texas Historical Commission ("THC)"marker
on it.

The title of the marker is the *** Home and depicts the house and the
***** ranch. The historical marker was applied for in February 1979.

Response: The *** Home does not meet the requirement for exemption
as a Recorded Texas Historic Landmark. Subsection (g) (1) (F)of Rule 3.298 -
Amusement Services provides as follows:

(1) Sales tax is not due on the sale of an amusement service if the
service is provided exclusively:

(F) in a place that is designated as a Recorded Texas
Historic Landmark by the Texas Historical
Commission.

I contacted ***, of the Local History Section in THC, to inquire if a
"Texas Historical Marker" was the equivalent of a "Recorded Texas Historic
Landmark" ("RTHL"). She stated that there were differences. Any remodeling
or modification of a building designated as a RTHL must first be approved by
THC. Remodeling or modification of a building having a Texas Historical Marker
does not require the permission or approval of the THC. Additionally, a Texas
Historical Marker will not reflect the RTHL designation.

This opinion is based on the facts presented. Other facts though similar may
provide a different result. I hope this information answers your questions.
If you need additional information, please call me toll-free at 1-800-531-5441,
extension 3-4502. The direct line is 512/463-4502. You may also write to Tax
Policy Division, Comptroller of Public Accounts. My Internet address is:
[email protected].

Sincerely,

Gilbert Zamora
Tax Policy Division