The Pellucid Perspective - January 2011 - (Page 2)

TAXATION Municipal courses face major property tax challenge Ohio ruling that could cost Cincinnati nearly $2.7M a year in municipal course property taxes could pose similar threats elsewhere By Jim Dunlap December ruling by the Ohio Tax Commissioner has the city of Cincinnati facing a property tax bill for the city’s seven municipal golf course properties that could total as much as $2.7 million annually. The ruling came nearly two years after the initial filing of a continued exemption from taxation complaint by Cincinnati area golf course owner Paul Macke, who alleges that by hiring Billy Casper Golf, a for-profit course management company, to operate its courses, the city has forfeited its exemption from paying taxes on the golf course properties. “This is going to be a game-changer in Ohio,” said Macke, whose family owns four courses in the Cincinnati area. “Any government entity that has a golf course and is looking to hire a management company had better be aware of this case.” A Increase your average food and beverage sale by 10%. Cincinnati has announced it will appeal the state tax commissioner’s decision to the Ohio Board of Tax Appeals within 60 days of the December 10 decision. The commissioner’s initial decision technically only applied to the city’s Woodland Golf Course in Green Township because that was the course cited in Macke’s initial complaint, but the state commissioner is now reviewing similar complaints filed by Macke on the other six city-owned golf courses, which appear likely to receive the same tax commissioner ruling. In addition to the property tax complaint, Macke has filed a similar complaint related to the sales tax paid by Billy Casper Golf on behalf of purchases made for the city courses, with the same rationale that by being run by a for-profit company, those purchases should be taxed at the same rate as products purchased by private operators. No ruling has been made to date on the sales tax complaints. Unfair competition charged 1.800.CLUBCAR, ext. 4782 While Macke has been much more aggressive in pursuing them through the legal system, his complaints echo the mutterings of other public course owners over the years. Private owners of public courses have long complained that the decks are stacked in favor of municipal and other government owners in terms of tax breaks, public funding and other competitive advantages that, they claim, allow publicly owned courses to operate more inexpensively and charge less for their product. Municipal owners reply that they are providing an amenity and open space for their citizens, and that they are more constrained by labor staffing regulations and requirements than private operators. While Macke contends that he doesn’t have a problem with for-profit course management companies per se, he does object to the contract awarded to, in this case, Billy Casper Golf, by the city of Cincinnati. In addition to the annual $200,000 management fee, Macke said that the contract calls for Billy Casper Golf to retain 83 percent of the food and beverage revenue at the courses, and 93 percent of the pro shop revenue. Macke claims those ancillary revenues enable Billy Casper to heavily discount municipal course greens fees and still make significant profits through food and beverage and merchandise spending. While Billy Casper Golf officials declined to comment for publication, they noted, accurately, that the property tax ruling has nothing to do with them, other than the fact that they January 2011 2 The Pellucid PersPecTive

Table of Contents for the Digital Edition of The Pellucid Perspective - January 2011

The Pellucid Perspective - January 2011
Municipal Courses Face Major Property Tax Challenge
Dec YtD Weather Impact, Nov YtD Utilization
2011 Equipment News Highlighted by Acushnet Fate
Is Groupon Good for Golf?
Symposium Examines Varied Aspects of Affordability in Golf
Dallas, Tx Core Business Statistical Area (CBSA)
Yes! Golf the Recession’s Latest Victum
Year of Change for Golf, for Better or Worse?

The Pellucid Perspective - January 2011