The Commonwealth Court of Pennsylvania has ruled that Overbrook Golf Club (OGC) and Radnor Valley Country Club (RVCC) are exempt from local business privilege taxes imposed by Radnor Township. This decision, filed on June 10, 2026, affects the two private golf clubs, which argued that their membership dues and fees should not be taxed. The ruling clarifies the application of local tax laws to nonprofit organizations.
The case originated when Radnor Township assessed business privilege taxes on the Clubs, claiming that their membership dues, fees, and assessments were subject to taxation. The trial court ruled in favor of the Clubs, stating that these dues are not part of taxable business activities. The Township appealed this decision, leading to the current ruling.
Background
Overbrook Golf Club and Radnor Valley Country Club are both nonprofit organizations established for recreational purposes. OGC operates as a social club and is recognized as a nonprofit under federal tax law. Similarly, RVCC is also a member-owned nonprofit. The Clubs charge various membership dues and fees, which are used for operational costs and capital improvements.
The dispute began in 2014 when Radnor Township conducted an audit and determined that the Clubs had improperly excluded their membership dues from the taxable income reported for business privilege taxes. Following the audit, the Township issued tax assessments totaling over $132,000 for the years 2016 to 2021. The Clubs contested these assessments, leading to a trial in the Delaware County Court of Common Pleas.
In December 2025, the trial court ruled in favor of the Clubs, stating that their membership dues and fees are not subject to the Township's business privilege tax. The court emphasized that the Clubs operate as nonprofit organizations and do not engage in business activities as defined by local tax laws.
The Ruling
The Commonwealth Court upheld the trial court's decision, affirming that the Clubs are not considered businesses under the local tax code. Judge Patricia A. McCullough stated, "the Clubs are not engaged in a 'business' under the BPT Code" and noted that the membership dues do not constitute gross receipts from a business activity.
The court found that the Clubs operate primarily for the benefit of their members, providing recreational facilities rather than services to the general public. The ruling clarified that the Clubs' operations do not fit the definition of a business as outlined in the Business Privilege Tax Ordinance of Radnor Township.
Impact
This ruling has significant implications for nonprofit organizations in Pennsylvania. It reaffirms that membership dues for recreational clubs and similar nonprofits are not subject to local business privilege taxes. The decision reinforces the protections provided under the Local Tax Enabling Act, which specifically excludes membership dues from taxable income for nonprofit organizations.
The ruling may set a precedent for other local municipalities considering similar tax assessments on nonprofit organizations. It emphasizes the distinction between for-profit businesses and nonprofit entities, particularly in how they are treated under local tax laws.
What's Next
Radnor Township has the option to appeal this ruling to a higher court, but details regarding any pending appeal were not available in the court filing. The outcome of this case could influence future tax policies and regulations affecting nonprofit organizations in Pennsylvania.