LR 8238
Taxability of Items Sold by a Municipality Owned Golf Club
May 04, 2023
Dear Applicant,
This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated January 31, 2023.
The facts as presented in your letter ruling request are summarized as follows and are similar to facts provided in letter ruling requests sent to the Department in 2017 and 2020:
Applicant owns a golf club that is open to the public. The Applicant has contracted with a professional management company to manage the golf club. The Applicant pays the management company a monthly management fee for its management services. The Applicant charges green fees to play on the golf course, and rents golf carts for use on said golf course. The Applicant also sells food, and beverages, including alcohol, and merchandise at the golf course. All revenue generated by the golf course belongs to the Applicant and is deposited into a bank account of the Applicant. The Applicant pays all expenses related to the golf course, including purchasing seed, sand, fertilizer, general office supplies, and maintenance parts for carts, and equipment.
ISSUE 1:
Are the Applicant's sales of green fees, cart rentals, merchandise, food, beverages, alcohol, and tangible personal property subject to sales tax?
RESPONSE 1:
No. The Applicant's green fees, cart rentals, merchandise, food, beverages, alcohol, and tangible personal property are not subject to sales tax.
Section 144.020.1(2) RSMo, imposes a tax upon fees and charges paid to access places of amusement.
Section 144.030.2(17) RSMo, exempts fees and charges paid to access places of amusement owned or operated by a political subdivision, with limitations applicable when proceeds inure to a private party. Golf courses are places of amusement, entertainment, or recreation. See, e.g., Luther (Buddy) Godwing d/b/a Buddy's Gold Shop v. Director of Revenue, Case No. 90-000864 RS (Mo. Admin. Hr'g Comm. 1991).
The green fees paid to the Applicant are for access to the Applicant's golf course, a place of amusement. The Applicant is a political subdivision, and represents that its ticket proceeds do not inure to a private party. Section 144.030.2(17) RSMo, therefore exempts ticket fees and charges used to pay for access to the Applicant's golf club.
ISSUE 2:
Are the Applicant's purchases of seed, sand, fertilizer, general office supplies, maintenance parts for carts, and equipment for use in the Applicant's golf club subject to sales tax?
RESPONSE 2:
No. The Applicant's purchases of seed, sand, fertilizer, general office supplies, maintenance parts for carts, and equipment for use in the Applicant's golf club are not subject to sales tax.
Missouri Constitution Article III, Section 39(10), RSMo, prohibits the state from imposing sales or use tax on purchases paid for out of the funds of Missouri political subdivisions. Section 144.030.1, RSMo, exempts from taxation "retail sales of tangible personal property which the general assembly of the state of Missouri is prohibited from taxing or further taxing by the constitution of this state." Missouri Code or State Regulations 12 CSR 10-110.995(3)(B) further explains that all sales of tangible personal property to a Missouri political subdivision are exempt from sales tax.
The Applicant is a Missouri political subdivision that purchases items for use at its golf course. Therefore, the Applicant's purchases for use in its golf course are not subject to sales tax.
This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals. If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change. For this reason, the interpretation set forth above should be reviewed on a regular basis. Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.
Should additional information be needed, please contact Legal Counsel Nathan Jefferson, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.
Sincerely,
Wayne Wallingford