News & Opinion

Some golf leaders drop ball on tax reform

Early in November, Jay Karen, the chief executive of the National Golf Course Owners Association, received an alarming call from a Washington lobbying group. Forbes Tate Partners, which represents We Are Golf, the coalition for golf’s leading organizations and their political interests, said the Tax and Jobs Act had been introduced to Congress on Nov. 2. The bill contained language that would eliminate the business-entertainment tax deduction – specifically, the 50-percent write-off for a round of golf.

Karen immediately reached out to his fellow We Are Golf members who had the most to lose with the proposed tax reforms. Besides the NGCOA, the Club Managers Association of America, the Golf Course Superintendents Association of America, the National Club Association and the PGA of America are likely to see their memberships negatively affected if corporate spending were to decline because of the elimination of the write-off.  

Karen put the wheels in motion for a collaborative letter to ranking members of the Senate Committee on Finance and the House Committee on Ways and Means, the two chief legislative panels on taxation, in an appeal to keep the deduction. IRS codes were addressed. A compelling comparison was made with the food and beverage industry, which was able to salvage its 50-percent deduction for business meals. The end of the letter pointed out that golf consists of nearly 13,000 facilities around the country that host more than 143,000 annual events and raise $3.9 billion per year for charity.

The letter, which was dated Nov. 30, was signed by Karen and his CEO counterparts: the CMAA’s Jeff Morgan, the GCSAA’s Rhett Evans and the NCA’s Henry Wallmeyer.

The glaring omission in the letter was the lack of an endorsement and signature by Pete Bevacqua, the PGA of America’s chief executive. The PGA of America has nearly as many members, 28,000, as those other four associations combined. Thousands of PGA members are involved in small businesses that cannot afford to lose any revenue sources. Bevacqua’s refusal to sign the letter should raise serious questions, not just among PGA members but elsewhere within the golf industry, as well.

“This would have been more effective with the signatures and influence of every golf organization under the sun,” Karen said. “Had we had more time and no competing issues in this tax bill, I believe we could have accomplished that.”

He no doubt was referring to the PGA of America, the PGA Tour and the LPGA, which were consumed with saving their own tax-exempt status.

“Our advocacy staff reached out to the standard trade organizations that typically co-sign our letters to Washington,” Karen said. “Although we knew they had their hands full with the tax-exempt issue, we should have knocked on the Tour’s door.”  

When contacted by Morning Read about the PGA’s refusal to endorse the letter to Congress, Bevacqua responded via email: “We continue to work through this all for the benefit of our membership and the industry and have nothing more to add at this time.”

By contrast, Morgan, who leads the CMAA, a nonprofit consisting of 6,700 club managers at 2,500 country, golf, athletic, city, faculty, military, town and yacht clubs, said: “This was less about the CMAA and more about our members. Any regulation that negatively impacts small business affects them. There were both good things and bad about the Tax and Jobs Act, but the elimination of the business-entertainment deduction hurts the business of golf.”

Bob Helland, the GCSAA’s director of congressional and federal affairs, said the lost deduction will be “devastating to golf.”

“The toxicity existing today in Washington, D.C., pertaining to bipartisan politics will make it very tough to facilitate any changes with this tax-reform bill,” Helland said. “I’m not optimistic about the chances of a technical fix when it comes to reinstating the business entertainment write-off.”  

Karen also pointed to the fast track of the tax reform.

“The president wanted passage of this bill before the end of the year,” he said. “It was passed 50 days after it was introduced. By comparison, the Affordable Health Care Act took nine months to pass. Unfortunately, this tax reform had ramifications that affected far more people.”  

In January, Steve Mona, who oversees We Are Golf through the World Golf Foundation, said in an interview with Morning Read’s Alex Miceli that the reduction in the corporate tax rate from 35 percent to 21 percent could stimulate more spending in golf (“Golf leader Mona: Tax setback not final,” Jan. 15). He conceded that any positive or negative effects from the tax-reform bill on the golf industry have not been quantified.

One thing is certain. Golf was fractured in its fight with Congress over the Tax and Jobs Act. Certainly, the PGA Tour, LPGA and PGA of America succeeded in saving their own hides by maintaining their tax-exempt status. But, did their focus on that issue detract from the rest of the industry’s efforts to salvage the business-entertainment deduction? 

All for one, and one for all? Not in golf, and not this time.

Ted Bishop, who owns and operates The Legends Golf Club in Franklin, Ind., and is the author of “Unfriended,” was president of the PGA of America in 2013-14. Email: tedbishop38pga@aol.com; Twitter: @tedbishop38pga