Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 295.1663


295.1663 Real Estate Association Membership Fees. Membership fees for real estate trade associations entitle members to a variety of services. The services include local lobbying, public relations, business network meetings, a local magazine or newsletter, information and education, adherence to code of ethics, enforcement of professional standards, and arbitration of disputes between buyers and sellers and between brokers and agents.

Some trade associations may operate a real estate store which sells standard real estate forms, signs, and other tangible personal property related to the real estate business. In some locations, the stores are open to the public, while other locations are open to members only. Where the stores are open to nonmembers, a nonmember may pay a higher price for the merchandise sold than to a person who is a member.

In view of the extensive services provided by the real estate trade associations to their members, it is evident that they are essentially service organizations. Therefore, under subdivision (a)(2) of Regulation 1584, charges for membership fees are not subject to sales or use tax. The true object of the real estate trade association membership is that the members benefit from the services provided by the association which are unrelated to anticipated retail transactions. 1/25/96.