ETA 2010 has been issued to explain that for purposes of determining whether income is deductible as bona fide initiation fees or dues, a health and/or physical fitness club must first show that it receives some income from dues and/or initiation fees solely for social benefits and not for services rendered. It explains the continued validity of Det. No. 97-146R, 17 WTD 133 (1998), and that the fact that a health and/or physical fitness club may have parties or other events for its members at no separate charge does not demonstrate that the member pays a portion of his or her dues for social benefits.
A copy of this advisory is available via the Internet at http://dor.wa.gov/docs/rules/eta/2010.pdf. Alternatively, a request for a copy of this advisory may be directed to: Roseanna Hodson, Legislation and Policy, P.O. Box 47467, Olympia, WA 98504-7467, phone (360) 570-6119, fax (360) 664-0693.
Alan R. Lynn