Revenue Ruling

Ruling Number:19-86-3
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Dues - Special Assessments
Effective Date:01/01/1986

UNDER KSA 79-3603 (n)

Pursuant to the Director of Taxation's Order dated May 25, 1984, all "special assessments" made by a club, organization, business, etc. to its members or prospective members shall constitute "dues" within the meaning of KSA 79-3606 (n), and shall be subject to Kansas state and local retailers' sales tax.

When interpreting a statute, the legislative intent behind the statute must be given full consideration and will not be construed so as to defeat its unmistakable intent.

Although the Kansas statutes do not define "dues", words of common understanding must be given their ordinary meaning. Webster's New Collegiate dictionary defines the tern "dues" as follows: "debts which are owed; something which is payable." Typically, once dues are paid, the member retains all rights and privileges of membership in a club, organization, business, etc.

The same result occurs with special assessments. Consequently, special assessments are dues. Albeit called by a different name.

It is clear that the manifest legislative intent is that all charges which are debts owed to a club, organization, business, etc., by a member or prospective member in order for said member or prospective member to enjoy the use of the facilities of said club , organization, business, etc., for recreation and/or entertainment shall be subject to Kansas state and local retailer's sales tax.

Typically, special assessments are charged one of two ways: (1) as an entry or initiation fee to become a member, or (2) as a periodic assessment to the current membership. Because of the nature of these assessments, prospective members are not allowed the use the club, organization, or business facilities for recreation or entertainment unless the special assessment is paid. Moreover, it he special assessment is to be paid in installments, new members will lose their rights of membership if they fail to pay any or all of the installments of the initiation assessments. Likewise, current members of a club , organization, business, etc., that are charged a special assessment lose their membership privileges if the assessment in not paid.

Clearly, special assessments are charges for the right to enjoy and use the facilities of a club, organization business, etc., for recreation or entertainment. This qualifies special assessments as "dues" as embraced by the legislative intent of KSA 79-3603 (n).

This ruling will apply to assessments made to existing members and new members, and it will apply to one time assessments whether charged to the existing membership or charged as an initiation or entry fee to new members. It will also apply if the member pays the assessment I one lump sum or pays the assessment in periodic installments.

This Revenue Ruling supersedes all ;previous Department of Revenue rulings and opinions, and shall become effective July 1, 1986.


Harley T. Duncan
Secretary of Revenue
Director of Taxation (913) 296-3044 - Income & Inheritance Tax Bureau (913) 296-3051
Sales & Excise Tax Bureau (913) 296-2461 - Mineral Tax Bureau (913) 296-7713

Date Composed: 10/06/1997 Date Modified: 07/02/2002