The First Amendment to this nation’s Constitution is the cornerstone of the existence of private clubs. It provides, “Congress shall make no law … abridging … the right of the people peaceably to assemble.” This amendment not only protects the “freedom of association,” but also impedes Congress from curtailing that right.
While it may seem that private clubs have an indelible place in both our nation’s history and its future, over the years, the existence and success of the club industry has been challenged by the very same government which is supposed to protect it. The club industry needs a strong advocate on Capitol Hill, lobbying to protect its existence and rights, and an organization that provides information, guidance and advice to ensure its future growth and success.
The National Club Association (NCA) fills this role, serving as both an ADVOCATE FOR CLUBS and a source of ANSWERS FOR CLUB LEADERS.
A History of Advocacy
Federal Excise Taxes
In the early 1960s, Congress implemented a 20 percent federal excise tax on private club dues and initiation fees. For other forms of entertainment, this tax had been reduced to 10 percent. Club leaders banded together to resist this apparent unfair treatment. Thus, in 1961 NCA was formed.
As Congress continued to tax clubs at a higher rate, NCA aggressively lobbied both Congress and the club industry to raise support for the plight of private clubs, and succeeded. By June of 1965, Congress repealed the excise tax on club dues and fees. NCA ensured that the club industry’s voice was heard on Capitol Hill.
The Caddie Relief Act
In 1997, NCA worked tirelessly to stop the Internal Revenue Service (IRS) from decimating a key component of the game of golf: the youth caddie program. The IRS wanted to remove independent contractor status for caddies and require clubs to treat those workers as club employees—seriously curtailing opportunities for young golf enthusiasts.
NCA formed an industry coalition, lobbied on Capitol Hill, and ensured the introduction of the Caddie Relief Act of 1997 to legislatively classify caddies as independent contractors. Seeing support rapidly growing for the bill, the IRS retreated from its initial ruling, saving caddie programs.
Deepdale Golf Club
In 2006, the mayor of the village of North Hills, N.Y., attempted to use the right of eminent domain to seize the private property of Deepdale Golf Club for public use by the village’s citizens. NCA was active in this battle to stop such overreach by a locality.
Ultimately, the New York State Legislature passed legislation to prevent this power grab by the local community over a club’s private property. Following this victory, NCA disseminated information nationwide, as the underlying issue of eminent domain abuse remains in many states even today.
Recent NCA Successes
The past four years have brought with them a focus on higher tax-rates for those who traditionally join private clubs, an unwieldy and costly health care law, untenable regulations for those clubs who rely on visa workers, and a spate of regulations from the National Labor Relations Board (NLRB) intended to give unions a significant advantage over club management.
So far, NCA has successfully lobbied to protect clubs from the most disadvantageous aspects of these developments. For example, in the past two years alone, NCA has:
- Successfully fought to prevent fundamental changes to the H-2B Visa Program. In a major victory for the private club industry, a federal judge granted a motion to stop the “Overhaul Rule” from going into effect, and through our lobbying efforts, we stopped the new H-2B Wage Rule from being funded by Congress.
- Worked with our allies to initiate litigation that prevents the National Labor Relations Board from implementing what is known as the Poster Rule, which would require clubs to post a bulletin in their employees’ break rooms telling them how to form a union and what constitutes an unfair labor practice by club managers. As of now, the U.S. Court of Appeals for the District of Columbia has stopped implementation of this rule pending further court action.
- Also filed suit to stop the NLRB’s “Quickie Election Rule.” This rule would allow unions to call for an election within 10 –21 days of a petition being filed and severely limits an employer’s ability to prepare for a union election battle. The Quickie Election Rule was struck down in the D.C. District Court in a lawsuit filed by NCA and its allies. However, it is expected that the NLRB will soon file its appeal to the U.S. Circuit Court.
- Successfully lobbied to repeal the 1099 reporting requirement provision enacted in the health care reform law that would have mandated onerous paperwork and administrative time to track purchases over a $600 threshold.
- Continued to lobby Congress to repeal employer penalties in the health care reform law. NCA is currently working to repeal the new tax that would apply to all health insurance policies sold. We are also gathering support to repeal the “employer mandate” that penalizes clubs with more than 50 employees. The bill already has 211 co-sponsors in the House and 40 in the Senate.
Current Challenges
The political climate in Washington today is distinctly anti-business, and many leaders continue to focus their attacks on top wage earners in the country—all in the name of “fairness.” Unless there are changes by January 2013, all Americans will be saddled with a multitude of new tax increases totaling almost $500 billion. This unprecedented tax hike is looming because of the pending expiration of the current income tax rates, new taxes from the Patient Protection and Affordable Care Act and the end of the two percent “payroll tax holiday.” These increased taxes will not only reduce the disposable dollars of individual private club members, but they will also reduce the net income of all club employees.
In response, NCA is actively lobbying members of Congress to stop these tax hikes and lobbying for more pro- growth, pro-business initiatives from Capitol Hill. If these initiatives pass, then the policies advocated by NCA will benefit clubs, their employees and their members and will potentially bring a stronger economic recovery for every America—which, after all, is “fairness” in its truest sense.
Our Call to Action
I am an unpaid volunteer in the private club world, not just as chairman of NCA, but also as the immediate past president of the Union League of Philadelphia, one of the many who serve in governance roles at private clubs. I support the club industry out of a continued passion for the protection of our First Amendment rights, upon which the club industry is founded.
For those of you who rely on private clubs for your personal livelihood, the growth and accomplishments of the club industry are vital to your personal success. The number of private clubs in this country has decreased in recent years, making the club leaders who remain even more important to the future of the club industry. All club leaders should be aware of current threats to the health of the club industry and partake in NCA’s efforts to maintain its strong presence on Capitol Hill.
NCA needs YOUR involvement. Take advantage of NCA’s vast array of resources to stay informed on the issues facing the club industry, and then turn that knowledge into power in the voting booth on November 6th. Speak to your colleagues about the issues and encourage them to become involved in NCA’s efforts. We are the voice of the club industry, and our voice gains
strength in numbers.
NCA preserves your history, protects your rights, and champions your future. Now is the time for YOU to support NCA with your words, actions and membership.
John “Jack” Zook, CPA, PFS, is the founder and managing director of Zook Dinon PA, Certified Public Accountants, located in Moorestown, New Jersey, and a tenured Professor at La Salle University in Philadelphia. He is chairman of the National Club Association and a past president of the Union League of Philadelphia.