Can a Homeowner Association (HOA) charge taxes on the dues?

Forum|Forum|10 months ago
June 3, 2025
1 reply
0 views

My HOA in Utah is charging taxes to our monthly dues. Can taxes be charged?

TurboTax Online

Mike9241

for what? what type of taxes?

Homeowners associations (HOAs) are generally not tax-exempt. They must pay income taxes and file tax returns, but they can take advantage of certain tax benefits under IRC 528 by filing Form 1120-H. However, HOAs can qualify for tax exemption under specific statuses, such as 501 (c) (4) or 501 (c) (7), which would exempt them from income taxes, except for unrelated business activities. It's important to note that while HOAs are non-profit corporations, they are not considered non-taxable entities by the government.

also you use the word "dues" rather than "assessments" - amounts charged monthly to owners to cover the expenses of operating the HOA. Generally, these would be income tax exempt.

dues could relate to something like the HOA having a golf course. That would likely be non-tax-exempt and be subject to income taxes.

we don't have enough info to give a definitive answer.

davidrshostakAuthor

Let me provide more information.

I live in a Property Owners' Association (POA), and in the CCR, it is mandatory to join the country club. The country club has a golf course and bills you a monthly DUES statement. On the statement, they charge 6.5% sales tax. I am trying to understand because joining the country club as part of the POA is mandatory. Is it legal to charge the tax on the statement from the country club? The POA has a separate assessment that it charges the homeowners.

Regards,

xmasbaby0

@davidrshostak You are asking about a sales tax. This is the user forum for TurboTax in which we answer questions about income tax and about how to use the tax software. You are asking about a sales tax that is being added to the statement from your country club. We cannot answer sales tax questions or legal questions. Contact your state and ask the state if the sales tax is legal.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**