GOLF TAX !!

[Dennis_Harwood]

California's Gov Arnold has proposed (in addition to increasing the Sales Tax to 9.5%) that the sales tax be levied upon golf services, including green fees, lessons, cart rentals, club rentals, range balls, etc.

If this passes, and catches on elsewhere, its going to increase the cost of the game 10%-- (and what is not clear is whether the proposed tax may be imputed to equity clubs, taxing the "value" of member rounds even though members may not pay green fees--or pay reduced green fees)--

Seems to me this would have a dire effect on the game--

[Tim Leahy]

It's Arnold, what did you expect, a gym tax? How about a cigar tax?

[Tom Yost]

I'm pretty sure Arizona charges sales tax on golf rounds.

[Guy Nicholson]

Why would golf be exempt from a tax that -- I presume -- applies to other goods and services? Is this normal in other states?

(Bear with me, I'm Canadian.)

[Guy Nicholson]

Meant to add, not looking for a lecture on taxes=bad, just on taxes=how.

[jeffwarne]

Dennis,
I've never worked in a state where golf services weren't taxed (or all services for that matter)
Our members pay sales tax of over $80,000 on their initiation fees!

[Lou_Duran]

"The government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Ronald Reagan

At the same time that the good Gov. proposed increasing the sales tax rate by 19.4% (1.5/7.75) and broadening the base to include such things as green fees, he has recommended tax cuts to benefit Hollywood with the rationale that it is needed to keep production here in CA.  Apparently the Gov. is not a golfer and is unaware that the industry has already deteriorated to the point where it is barely moving.

It is curious that he does seem to understand how high costs affect one segment of the economy but not others.  Being that he is part of Camelot brain trust, maybe he is privy to new advanced theories of economics dealing with price elasticity.

Oh, by the way, CA has an income tax with a top marginal rate of 9.3% and a surchage of 1% for those making over $1 Million.  It will lead the nation with a 9.25% sales tax.  And with all this, it will have a projected $20+ Billion budget deficit next fiscal year if things don't deteriorate further.  The sustainability of the golf industry is the least of our problems.

As the Rev. Wright articulated so elegantly, "the chickennnnnns are coming hommmmme to rooooooost"!  "Yes we can"?     

[George Freeman]

Our members pay sales tax of over $80,000 on their initiation fees!

Jeff,

I'm not following...unless it's a million dollar initiation @ 8%.  Can you explain?

Thanks,

George

[Chip Gaskins]

Republican's simply can't help themselves when it comes to raising taxes!

[C. Squier]

Our members pay sales tax of over $80,000 on their initiation fees!

Jeff,

I'm not following...unless it's a million dollar initiation @ 8%.  Can you explain?

Thanks,

George

George, that was my math too.....I'm lost as well.  I guess if you're writing a check with 2 commas, what's an extra $80k?

[Jeff_Brauer]

I remember the introduction to the World Atlas of Golf, 1976 version, contained a rant about how the then new removal of tax benefits for private club memberships would destroy golf.  Obviously, that didn't happen. 

At the same time, Ahnold should probably be told how much golf tourism brings to the economy of CA, including resort areas like Palm Springs and how much will just go to other cheaper areas, much like Calfifornians who can afford it are simply moving out of state.  Good weather is one thing, but its not the only thing in choosing a place to live.

[Mike Benham]

Our members pay sales tax of over $80,000 on their initiation fees!

Jeff,

I'm not following...unless it's a million dollar initiation @ 8%.  Can you explain?

Thanks,

George

George, that was my math too.....I'm lost as well.  I guess if you're writing a check with 2 commas, what's an extra $80k?

I believe Jeff means the combined total of sales tax collected by the club and forwarded to the state ... 20 new members at $ 50,000 each in $ 1,000,000 in initiation fees.  Each new member pays $ 4,000 in sales tax = $ 80,000 combined ...

[Joey Smith]

We've been paying sales tax in Tennessee for about 10 years.  That also includes the monthly dues at our clubs. 

One of our bright legislatures tried to pass a bill several years ago that would have taxed the golf course property as improved land and no longer tax it as basically farm land.  We fought it and even hired a lobbyist.  One of our senators was a "friend of golf"  and assisted as well.  It was defeated.

This would have been devastating to our golf business!

This is the one you'll want to fight - if it comes to you your state.

It will roll around - some newly elected representative will try it again - and we'll fight it again.  We've even got a fund for this now.   

We'll win again...

jj

[jeffwarne]

George,
nothing wrong with your math....

interesting to see what happens next year in the golf business (all business for that matter)

[PThomas]

yet another political thread, oh boy

[Chip Gaskins]

yet another political thread, oh boy

or is it?

[Lou_Duran]

Not politics Paul, economics.  Weren't you lamenting the closing of Chicago golf courses due to declining economic conditions not that long ago?  Oh boy, it is not hard to tell who butters your bread!   

Chip,

The Gov. is a Rino, a rather common species nowdays, and no doubt a nice man.

[Dan Chapman]

Wowzers.

[PThomas]

Not politics Paul, economics.  Weren't you lamenting the closing of Chicago golf courses due to declining economic conditions not that long ago?  Oh boy, it is not hard to tell who butters your bread!   

not sure what your last line means Lou, but if you read some of the responses it is getting political already

fine with me, i'll ignore like i do all the other political ones

[Lou_Duran]

Paul,

Is it political to suggest that high gasoline prices drive the costs of other things such as food, shelter, transportation, etc. and that this creates a hardship for consumers?  If not, why is it that when taxes are increased and these drive the costs of the same, then somehow a discussion of the matter is political?  Of course, only you can decide what you read and choose to address.   

[JohnV]

http://www.ncga.org/2008/11/07/governors-budget-proposal-targets-golfers/

The California Alliance for Golf is trying to stop this.

[Dean Paolucci]

NJ levies tax on all portions of a membership above the portion which is for the "eating club" subscription.  Read the house portion of the membership is excluded.  All other golf or sport (Tennis, Pool, and Fitness) fees are taxed at a rate of 7%.

[Jason McNamara]

Dennis -

Seems to me it's more likely that non-equity memberships would get hit.  Or are you thinking that's a given?  (Jeff Warne, are you in CA?)


Guy -

To answer your question, various states differ widely in their practices.  Some states have no sales tax, others tax restaurants but not groceries, others tax all food, many exempt prescriptions, as well as clothing under a certain price.  Smaller governmental entities may charge their own taxes - often much smaller but not always (NY state and esp. NYC).  Any goods bought in a pro shop are already taxed in CA, just to be clear.


Chip -

This forum has enough tedious political threads without your "help."  Please consider removing the gratuitous comment.

[Jeff_Brauer]

http://www.ncga.org/2008/11/07/governors-budget-proposal-targets-golfers/

The California Alliance for Golf is trying to stop this.

I read that article, some comments, and the link to state tax rates.  One interesting thing is that in California, tax rate may be adjusted annually according to a formula based on balances in the unappropriated general fund and the school foundation fund.  I can see voters being ticked off at an annual debate about what sales tax should be and its going to be a landmine for politicians.  All Arnold is doing is following the law there and trying to bring a balanced budget about.

Of the comments in the link, the golf alliance does bring forth the relative income potential of the golf biz in CA - nearly $3 Billion in golf revenues, with presumable a chunk of that in tourism.  Wineries were more than twice that, and semi conductors were even bigger, but golf is among CA's major businesses.

The comments section produced the typical comments you would expect.  The one I agreed with most was that they should tax the entire recreation industry - ski, bowling, etc. rather than single out golf for new taxes.  At least, it seems to me that targeting a broad section of related businesses is more defensible on the premise of equal treatment.

[Adam Clayman]

The similarities to the late 18th century are increasing. Maybe @ the next KP the group should dress as tennis players and have a tea party. Milk or lemon?