Republican farmer. [volume] (Bridgeport, Conn.) 1810-1920, 1918-02-22
LODGE DUES ARE
EXEMPTED UNDER
REVENUE RULING
Fraternal Bodies Not Taxed
Under Law of October
Club Dues Must be Taxed

Section 7O1 OF the ACT or Oct. 3,
1917, provides that there shall be
levied, assessed, collected, and paid,
a tax equivalent to 10 per centum of
any amount paid as dues or mem
bership fees (including initiation
fees), to any social, athletic, or
sporting club or organization, where
such dues or fees are in excess of SIP
per year; such taxes to be pail by the
person paying such dues or fees;
provided, that there shall be exempt
ed from the provisions of this section
all amounts paid as dues or fees to
fraternal beneficiary society, order, Or
association, operating under the lodge
system or for the exclusive benefit of
the members of a fraternity itself
operating under the lodge system, and
providing for the payment of life,
sick, accident, or other benefits to
the members of such society, order
or association or their dependents.
In connection with this section of
the law there seems to be some mis-
understanding on the part of fraternal
| organizations as to whether or not
they are subject to the tax under the
above named section.
In regard to the question raised this
Office rules that fraternal societies,
orders, or associations are social or
CARNATIONS within the meaning of
| Section FOL, and their dues are taxa
BILE unless exempted by the proviso
of the section.
For the exemption to apply the So
ciety, order, or association must not
| ~ Nd
under the lodge SYSTEM" but also
beneficiary, that is. it must make pro-
vision for the payment of pecUniary
benefits to lis members or their de-
pendents, this being the very essence
of beneficiary organization. Some
/ thing more than charity, relief, or
occasional giving of money is neces-
sary. A distribution in accordance
with a fixed and definite plan is con-
templated. It must actually pay life
accident, or other benefits or make a
practice of providing for it's members
or their dependents inacial aid SINH
lar in character to such benefits.
If a fraternal order pays only pc.
cuniary benefits to it's members OF
their dependents and provides for
sick, accident, or death benefits
whether in the form of payment Of
money. hospital treatment, burial, OF
care for dependents either in homes
or elsewhere, the dues would be ex-
empt. This fact should be deter.
mined by the charter, ritual, bylaws
or rules of the organization operating
under the lodge system.
Section 700 of the Act of Oct. 3
1917, provides that there shall bt
levied, assessed, collected, and paid
tax of 1 per cent. for each 10 cent.
or fraction thereof of the amour
paid for admission to any place. in
Guiding admission by season ticket OF
subscription, to be paid by the per
son paying for such admission.
In connection with this section O
. the law there seems to be some mis-
understanding as to whether or no
fraterna1 societies, orders, or associa
tons conducting entertainments, tn
entire proceeds being turned into tn,
lodge treasures, are required to col
lect the admission tax imposed unde
this section.
In regard to the question raised thi
Office rules as follows:
To be exempt, all the proceed
must inure exclusively to some spe
, cif1c religious, educational, or charita
, BILE institution organized for thes
purposes. Charity Organizations mus
be broad enough to include all per
= sons. It is not regarded as CHART
} where a certain organization, such a
: a lodge for example, holds entertain
ments the proceeds of which ar
placed in the lodge treasury. to b
distributed only to members of tn
| Iodoa mr. their dennDdentS