Industry News

In matchup against lawmakers, golf sees an opening

The second of a two-part series

By Alex Miceli

Golf has had a difficult time with Washington and its policymakers over the years. For disaster relief and tax benefits, legislators have lumped the game into a category that includes massage parlors, casinos and liquor stores. In the wake of Hurricane Katrina’s devastation in 2005 along the Gulf Coast, golf operators were shut out of federal funds.

As Donald Trump took the oath of office Friday as the nation’s 45th president, the outlook could improve greatly for golf.

"From this day forward, it's going to be only America first, America first,” Trump said during his inauguration. “Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families.

"We will follow two simple rules: Buy American and hire American.” 

In the past decade, We Are Golf, a coalition of leading golf organizations, has focused primarily on the regulatory and legal issues facing the game. The golf industry has been tainted with the perception of being a sport for wealthy participants who do not need tax benefits. We Are Golf counters that golf is a $68.8 billion industry that affects some 2 million jobs. 

We Are Golf claims on its website that the industry “remains misunderstood by too many of our nation’s policymakers.” Leaders hope that Trump, whose business interests include 12 U.S. golf properties, can sway legislators to see things differently. 

Golf leaders want to be able to explain their issues and offer input to legislators instead of being dictated laws and regulations to the game. Those issues – notably involving labor and the environment – are worth millions of dollars and offer a potential trickledown benefit to the consumer.

“We’re not an association that says there should be no regulation,” said Chava McKeel, director of government affairs for the Golf Course Superintendents Association of America. “We just want there to be sustainable regulations that provide a balance between protecting the environment and companies keeping its doors open for business.” 

In addition to regulations regarding water, foreign workers and overtime, the migration of clubhead manufacturing overseas has created a tariff issue. All companies that import clubheads into the U.S. pay a 4.9-percent tariff, and all imported golf bags are levied at a 7-percent rate. 

Because most golf clubheads and bags are made overseas, the industry recently has asked for tariff relief from Congress, contending that U.S. manufacturing jobs are not at risk by these imports because the work already is being done elsewhere.

Legislation that would have reduced the tariffs by $5.5 million failed to pass the House last year, but relief is on Congress’ agenda for 2017. One potential snag: a proposed border-adjustment tax. It would hit all imports, including golf equipment, at a much higher rate than the current tariffs.  

Although the House is leaning toward making the tax part of a comprehensive tax-overhaul plan in this Republican-controlled Congress, neither the Senate nor President Trump has taken a firm position on the tax.

“What we’re talking about is a concept,” said Bill Sells, senior vice president government relations and public affairs of the Sports and Fitness Industry Association. “I don’t think (anyone) really knows how this is going to play out.”

Golf faces numerous issues entering the new year, including individual tax benefits for golf course membership and the Personal Health Investment Today Act that, if passed, would provide up to $2,000 for joint filers for qualified sports and fitness expenses, which could include golf fees and equipment.

With an avid golfer and course owner in the White House, the industry is cautiously optimistic that its leaders not only will have a seat at the table but a voice in golf-related public policy.

If so, course owners, manufacturers and consumers could benefit.

Alex Miceli is founder and publisher of Morning Read.