Souths stripped of tax-exempt status
One of Australia's biggest leagues clubs, Souths Juniors, has lost its tax-free status after a court found its main activity was gambling rather than sport.
The Administrative Appeals Tribunal revoked Souths Juniors' income tax exemption last week, The Australian Financial Review reported.
The court decided its operation of a "miniature Las Vegas" overtook its support for junior rugby league or the NRL's South Sydney Rabbitohs.
Souths Juniors has assets of $43 million and provides substantial activities to members including 545 poker machines, free shows and $5 steaks, the newspaper said. It also has 21 holiday units, a hotel, two gyms, and interest in a golf course and a catamaran cruiser.
The decision, which is a victory for the taxman, could affect 3000 clubs nationwide as it threatens the privileged tax status of the clubs industry.
"We are closely examining the ruling in regard to Souths Juniors and it potential to create a worrying precedent for more than 3000 sporting clubs across Australia," Clubs Australia chief David Costello told the newspaper.
Souths Juniors said 80 per cent of its profits, or $4.6 million in 2003, was distributed to the junior league and the Rabbitohs.
But the tribunal said sporting donations accounted for only 34 per cent of profits.
Of course, Mr Iemma has softened his stand re: pokie taxes but this AAT decision moves in the right direction
Rather than try and rectify the situation, Souths Juniors have told the Rabbitohs that their $1m p.a. grant cannot be guaranteed. In other words, they would rather pay tax and operate as a mini-casino than increase community grants.
Other clubs that lose touch with their charter and their community by not contributing great amounts of money to local causes may also face the same fate.
I couldn't be happier. Clubs have it easy with pokies. They should be made more accountable. Rather than, or in addition to taxes, the minimum obligations clubs have to meet re: community donations should be increased and extended to pubs (who also hold pokies).
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I'll be where the eagle's flying higher and higher
Gonna be your man in motion, all I need is a pair of wheels
Take me where my future's lyin', St. Elmo's Fire