The Pennsylvania Department of Revenue (DOR) issued a sales and use tax ruling Jan. 31 clarifying that membership fees to join a professional association are taxable if the member receives tangible personal property in addition to non-taxable services in exchange for their dues payment.
While the ruling acknowledges that a membership fee in and of itself is not taxable, it states that “if the membership fee includes the transfer of taxable tangible personal property, in addition to nontaxable services, the entire charge for the membership is subject to tax.” Tangible personal property could include things like videos, books or other publications, as well as apps, webinars or other goods that are digitally delivered, streamed or accessed.
The ruling has drawn the attention of membership associations in Pennsylvania and at least one organization – the Pennsylvania Institute of Certified Public Accountants – has reached out to the Pennsylvania Department of Revenue for a meeting.
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