Welcome to Luca!globe
Untitled Article Current Issue!    Navigation Tips!
Main Menu
CPA Journal
Professional Libary
Professional Forums
Member Services



By Robert A. Reitman, Frank & Zimmerman & Company LLP

Dues paid to any social or athletic club in New York State could be deemed to be subject to New York State sales tax. The question arises whether any portion of the monthly fees of a homeowners association would be subject to sales tax, especially when the association maintains recreational facilities.

The New York State sales tax law contains a provision that became effective on December 1, 1995, that subjects dues paid to any social or athletic club in excess of $10 to New York State sales tax. There are exceptions to this section of the law and one of them specifically addresses homeowners' associations. The exception states that dues paid to a homeowners' association will not be subject to the tax. A homeowners' association is defined as an association (including a cooperative housing or apartment corporation) where the membership is comprised exclusively of owners or residents of residential dwelling units, including owners of units in a condominium, and including shareholders in a cooperative housing or apartment corporation, where such units are located in a defined geographical area, and the social or athletic facilities must be within that area. The recreational facilities must be available for use by the members of the homeowners' association, but may be available to nonmembers.

In a December 30, 1996, Advisory Opinion [TSB-A-96 (86)S], the issue was raised whether a homeowners' association that was acquiring the swimming pool and tennis courts from the developer of the complex would have to charge sales tax on a portion of its monthly dues. A portion of the homeowners' association's dues are put into a reserve fund for the purchase of capital items. In this case New York State stated that this homeowners' association's monthly fees meet the criteria to be excluded under the homeowners' association exclusion.

Please remember that decisions expressed in advisory opinions are limited to the facts stated within the opinion and cannot be used by any other taxpayer to defend themselves.

If a homeowners' association charges monthly locker fees for use at their recreational facilities these charges are subject to New York State sales tax. These charges are considered storage of tangible taxable property not held for resale. *

State and Local Editor:
Marshall L. Fineman, CPA
David Berdon & Co. LLP

Interstate Editor:
Stuart A. Rosenblatt, CPA
Wiss & Company LLP

Contributing Editors:
Henry Goldwasser, CPA
M. R. Weiser & Co LLP

Leonard DiMeglio, CPA
Coopers & Lybrand L.L.P.

Steven M. Kaplan, CPA
Konigsberg Wolf & Co., PC

John J. Fielding, CPA
Price Waterhouse LLP

Warren Weinstock, CPA
Paneth Haber & Zimmerman LLP


The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

©2009 The New York State Society of CPAs. Legal Notices

Visit the new cpajournal.com.