SPORTS BODIES CONCERNED.

Press, Volume LXIX, Issue 20906, 13 July 1933, Page 13

SPORTS BODIES CONCERNED.

* POSITION REGARDING INCOME TAX. COMMISSIONER'S QUERIES. [THE PRESS Special Service.J AUCKLAND, July 12The recent active interest of the Commissioner of Taxes in the financial affairs of incorporated societies has been causing some concern to officials of sports and other bodies, inc profits of incorporated societies, if derived from non-members, have lonj, been open to assessment for income tax purposes; but this power has been so rarely used that not many ha\ e known of its existence. The position apparently is that while in normal times it was not thought worth while to explore these scattered and comparatively small sources of revenue, the Treasury is now being compelled by the present difficult conditions to seek every penny to which it may be legally entitled. Large nurnbers of incorporated sporting . clubs have therefore been receiving circular letters from the Commissioner of Taxes asking for copies of their balancesheets. The legal position, as laid down by recent authority, is that clubs and other associations formed for the mutual benefit of members, and not for the purpose of gain, are exempt from tax on any profit derived from trading with members, but are liable on profits from trading with non-mem-bers and on interest derived from investments. Leases of Property. With some bowling clubs which lease parts of their properties to croquet clubs or tennis clubs, the furnishing of the balance-sheets has drawn from the Commissioner of Taxes a further letter enquiring what portion of the club's expenditure had been incurred on rented properties. Apparently the intention is to charge income ta'x on any profits that may have been made from tennis or croquet clubs. , , _ , The secretary of the Auckland Bowling Centre, Mr G. L. Gladding, has been receiving many enquiries from troubled club treasurers, who are finding that the commissioner's enquiries are involving them in a considerable amount of clerical work. Mr Gladding expressed the opinion that whether bowling clubs can be taxed or not will depend largely on the form in which their objects are expressed in thenconstitution. If these are purely to promote the game of bowls and social fellowship among members, they will be exempt; but if they include any commercial activities such as the purchase of land, they will come within the commissioner's reach. In any case they cannot be taxed on receipts from members, but only on what might be derived from the green fees of outsiders or from the participation of outsiders in tournaments. Position of Bowling Clubs. "Personally, I do not think bowling clubs have much to fear," said Mr Gladding. "Most of them are only just making ends meet, and the amount involved will be very small. The biggest thing is the annoyance of reproducing past balance-sheets, and if they "do not do it there will be trouble." Some athletic bodies have also received recently from the Treasury copies of a circular calling attention to the Unclaimed Moneys Act. Apparently the Treasury has some idea of gathering in all unclaimed gold medals to help to balance the budget.