The Wall Street Journal recently reported that the US Tax Court ruled a golf club in North Carolina does not qualify for their conservation easement tax benefits, over a decade after having donated their development rights to a land trust. I read the 60-page court ruling (feel free to read it yourself here), and I don’t feel qualified to say whether or not I agree with the ruling. But the issue, and the WSJ article, provide a glimpse into the issue of golf courses being singled out by our friends in Washington as unworthy of certain programs or relief that are available to just about all other kinds of businesses.
Thankfully, the We Are Golf coalition (of which NGCOA is a founding member) has made it a priority to change the attitude towards golf that creeps into legislation, rulings, policies, etc. There is no basis or excuse for this treatment except for some distorted and provincial perception problems, which we are trying to fix.
The good news is that Congress is looking to extend the easement program permanently, and We Are Golf’s efforts to ensure golf is not specifically excluded from the program have been successful with regard to the most recent language in the so-called “tax extenders package.” This is an example of your trade associations at work.
Below is the “Letter to the Editor” I submitted to the WSJ. Let’s hope they publish it. To industry followers of my blog, be sure to do your part in your city, county, state or country to be sure golf gets the respect we deserve. At minimum, that is to be treated fairly.
Jay
Dear Editor,
The recent ruling by the U.S. Tax Court to overturn the conservation easement tax credits of a golf club in North Carolina, covered by Richard Rubin in “IRS Tees Off,” should not be a harbinger for reversals in golf.
There are specific qualifications landowners must meet to qualify for conservation easement tax benefits, including protection of environmental systems and preservation of open space. These are important priorities around our country, especially in densely populated, urban areas where green space is shrinking. Many golf course properties meet the easement requirements; those which don’t should not get the tax benefit.
Some in Washington, D.C. have attempted to single out golf courses from qualifying for conservation easements. Unfortunately, it is a treatment our industry of 15,000 small business owners and operators have seen time and time again. This is reminiscent of when golf was lumped in with massage parlors and tanning salons as business types specifically excluded from disaster relief benefits after Hurricane Katrina. The broad brush is often used to paint golf as a playground for the elite, and therefore somehow worthy of exclusionary treatment.
While employing nearly two million Americans, course owners and operators work hard to make a living by both providing a great recreational experience and being good stewards of land and water. Nine out of ten golfers play on public facilities (which make up 75% of all courses in the U.S.), and the average American pays $26 in greens fee to play. Not quite the dens of iniquity imagined by some elected officials and administrators.
Tax breaks should not be easy to achieve, but they shouldn’t be harder simply because we are golf.
Sincerely,
Jay Karen
CEO, National Golf Course Owners Association
UPDATE 1/13/2016:
The Wall Street Journal printed the following edited version of my response.
#FromTheCEO