Wednesday, February 6, 2013

Private country club earning $1.2 million in profits is tax-exempt

The Carolina Country Club is one of the most prestigious clubs in Raleigh, North Carolina. The club has been around for over 100 years and membership to join is by invitation only. While the Carolina Country Club’s most recent tax forms shows it generated nearly $13 million from dues and other resources, the club’s nonprofit status insulates it from paying corporate income tax.

The Internal Revenue Service tax code allows social clubs, including those that charge members thousands of dollars to join such as Carolina Country Club, to apply for tax-exempt status.  Unlike traditional nonprofits, such as churches or charities, country clubs are not required to have a charitable purpose. However, the clubs still have to pay property and sales tax and tax on investment and nonmember income. Moreover, nonprofit status for organizations like Carolina Country Club imposes restrictions on advertising, paying dividends, and bookkeeping privacy.  The real benefit these clubs receive is avoiding the corporate income tax.


| Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference Private country club earning $1.2 million in profits is tax-exempt :


Post a comment