Texas Imposes Sales Tax on Membership Fees of Non-Profit Corporation

Jun 8th, 2021

Texas recently ruled that a non-profit corporation from Pennsylvania must collect sales tax on its charge for membership and any other related charges. The Taxpayer is a professional non-profit association based in Pennsylvania, who sells individual memberships on an annual basis for a single fee, plus a one-time application fee for new members.

In Texas, membership fees are taxable as an information service. Texas defines an information service as "furnishing general or specialized news or other current information." The Taxpayer's membership includes access to an online library of industry reference documents, industry publications, and magazine subscriptions as well as access to a platform that includes articles and papers written by individuals in the Taxpayer's industry. Because of this, the Taxpayer must collect sales tax on their membership fees in the state of Texas.