Pennsylvania Country Clubs Escape Business Tax on Member Fees

Two private clubs in Radnor Township, Pa., don’t have to pay a municipal business privilege tax on membership dues because the members manage the club for their own benefit, a state appeals court ruled.

Pennsylvania permits towns to levy a gross receipts tax on businesses operating within their borders. The statute explicitly forbids municipalities to tax the “membership dues, fees or assessments” for nonprofit organizations, including “golf and tennis clubs.”

“There is no dispute that the Clubs are not-for-profit social clubs. They are not a commercial enterprise carried on for profit or as a livelihood,” Pennsylvania Commonwealth Court Judge Patricia ...