As a step to preserve open space in New Jersey, the New Jersey Golf Course Owners Association is working with the New Jersey Division of Taxation and the state legislature to clarify the new sales tax law as it applies to the golf industry.
The NJGCOA has been advising state legislators on the golf industry and the fees private golf clubs charge, and how taxation of the industry could affect the state. The state budget for 2007 included taxation on "sporting clubs" including private golf clubs. Bill #S-2269, having passed in the Senate on Dec. 14, 2006, is now assigned to the assembly committee.
There is strong momentum in the legislature to pass this bill in an effort to clarify the legislative intent of the original sales tax bill as it relates to sporting clubs, which was to impose sales tax on initiation fees OR membership fees, but not both. New Jersey Division of Taxation has incorrectly interpreted the existing law, thus causing the need to clarify tax imposition specified in the bill.
While the NJGCOA sees this as a positive step, the association is concerned that taxing golf club membership, either initiation fees or annual fees, will have a negative effect on the state's golf industry which has been weathering a downturn. If that were to occur, many golf course owners would find it more profitable to sell or develop their properties for alternate uses and New Jersey would lose a significant amount of open space.
"In other areas, where the golf industry has suffered similar downturns, golf course owners have put their properties up for sale to developers," said Robert Twomey, president, NJGCOA. "In many cases, the state has had to step in and purchase the golf courses in order to preserve open spaces. We hope to avoid a similar situation in New Jersey."
