Dues Are Not Admissions (Rescinded April 29, 1991)

AUTHORITY: section 144.270, RSMo 1986. S.T. regulation 010-83 was filed Oct. 28, 1975, effective Nov. 7, 1975. Amended: Filed Aug. 13, 1980, effective Jan. 1, 1981. Emergency rescission filed Nov. 15, 1990, effective Nov. 25, 1990, expired March 24, 1991. Rescinded: Filed Nov. 15, 1990, effective April 29, 1991. St. Louis Country Club v. Administrative Hearing Commission, 657 SW2d 614 (Mo. banc 1983). The issue in this case was whether private country clubs which are not open to the public must pay sales tax on fees charged to members who bring guests to enjoy certain club facilities. The organization in question was an IRC Section 501(C)(7) not-for-profit tax-exempt corporation. Attendance at the club by nonmembers was strictly limited. Fees for golf and tennis were charged. Before discussing the merits of the matter the court held that a) the director of revenue does not have to personally sign and issue each deficiency assessment; b) an opinion letter, which is not directed towards the taxpayer, written by an earlier director of revenue and which erroneously states the law does not stop an assessment by a later director of revenue; and c) the waiver of the statute of limitations entered into by the taxpayer was a valid contractual agreement supported by consideration and, therefore, it would be recognized. With respect to the merits of the case, the taxpayer asserted that it should not be assessed tax because it is a private not-for-profit social organization which is not engaged in business and the guest fees are not paid to or in any place of amusement or recreation. Therefore, they did not fall within section 144.010.1(8), RSMo nor were they a business as defined in section 144.010.1(2), RSMo. The court found without comment that the country club was a place of entertainment. With respect to whether it was a place of business, the court said that the definition of business contained in section 144.010.1(2), RSMo is special. The definition “any activity engaged in by any person, or caused to be engaged in by him, with the object of gain, benefit or advantage either direct or indirect” was found by the court to be broad enough to include the activity of allowing guests to use facilities for a fee. Allowing guests to use the facilities benefits the club by attracting members.