Mount Vernon calls on state to determine where Bronxville Field Club's sales taxes go

When the exclusive Bronxville Field Club sought a new director of membership experience in 2023, it turned to a well-connected recruitment firm to find the right candidate.

The firm's ad purported that the club was located “in prestigious Bronxville, NY,” the fabled suburb known for its mansions on the twisting village streets , top-notch public schools, and an easy commute by train to Manhattan. After all, the club’s mailing address is 40 Locust Lane, Bronxville, NY 10708.

That address, however, which has been used for state and federal tax documents, as well as on its website, is not the club’s location. The club is located neither in the 10708 zip code nor in prestigious Bronxville. The club was established across the municipal boundary on eight acres in the city of Mount Vernon 99 years ago, where it has become the focus of a growing municipal battle over taxation and environmental justice.

More: Posh Bronxville club keeps growing while Mount Vernon neighbors see floods

As Mount Vernon public works officials assess the club's unpermitted connection to the city's stormwater system, Mount Vernon Comptroller Darren Morton said he filed a complaint this month with the state Department of Taxation and Finance, seeking an official inquiry into the allocation of sales tax revenues from the club.

“My concern is that there seems to be two different addresses, and I want to see the address on their certificate of authority and their quarterly forms,” Morton said. “That would dictate where the sales tax is being issued.”

Bronxville Field Club legal counsel Kathy Zalantis insists that the local share of the club’s sales tax revenues have always ended up in Mount Vernon.

“As you are aware, a mailing address does not determine where an entity pays sales tax,” Zalantis said. “The Club has always paid sales taxes to the city of Mount Vernon and will continue to do so. The club looks forward to assisting the city of Mount Vernon mayor and City Council with whatever they need.”

Mount Vernon mayor: If you're doing business in city, pay taxes to city

Sales tax revenues are remitted by merchants to the state Department of Taxation and Finance, which then allocates the local share of the levy, based on where the service was provided, or the goods were sold. For online purchases, the tax is paid based on where the item is delivered.

At a Jan. 11 meeting of the Mount Vernon Industrial Development Agency, Mayor Shawn Patterson-Howard said the city was intent on determining whether the city has received all sales tax revenues due from the club.

“There’s been so much said about the Bronxville Field Club and whether their taxes and revenues come into Mount Vernon,” she said. “If you are duly located in Mount Vernon, and doing business in Mount Vernon, then you should be paying taxes to the city. That’s something we are leaning into and addressing."

Mount Vernon activist Gabriel Thompson, who has encouraged the city to crack down on the club’s unpermitted connection to the city’s stormwater system, has also pushed the city to investigate the sales tax issue.

He lauded Morton for taking action.

"I’m glad the city is holding the club to account,” he said. “They have essentially redlined eight acres of Mount Vernon for their little tennis club that serves the pleasures of the elite. And they have the gall to spit in the face of our city by denying our very existence. It makes me sick to be honest. It's one more artifact of a history of exclusionary practices by Bronxville and its ilk."

Sales tax revenues mount up

The sales-tax take from the club — at 8.38% — could be substantial, with a good chunk of its $10 million in annual revenues subject to the levy.

State law requires members of athletic clubs be taxed on annual dues and membership fees. At the Bronxville Field Club, there's an initiation fee of $37,000 for new members, and annual dues of $9,040, according to the recruitment ad, which noted there are 630 club members.

More: Mount Vernon stands up to Bronxville and issues violation to Bronxville Field Club

Bronxville resident Patrick McEnroe, part of US tennis leadership, belongs to the field club. McEnroe, who serves as president of the International Tennis Hall of Fame in Newport, Rhode Island, is covering the Australian Open in Melbourne for ESPN.

Food and drink are taxed at the club’s restaurant and function hall. So is the work of local craftsmen who repair and maintain the club’s world-class facility, with 14 tennis courts, four squash courts, three paddle tennis courts, and a swimming pool.

Members are assessed an additional $1,200 a year for the club’s capital fund.  In 2021, revenues for capital fund and initiation fees totaled $1.5 million, according to its federal IRS 990 report.

Where the local sales tax share goes

Where the services are provided means a lot to Bronxville or Mount Vernon. The sales tax in both communities is 8.38%, with 4% levied by the state of New York and 0.38% going to the Metropolitan Transportation Authority in both communities.

It's how the remaining 4% local share gets allocated that matters. In Mount Vernon, it all gets sent from the state to the city, with $28 million projected in 2024, funding 19% of the city budget.

The sales tax of 8.38% applies to sales in Bronxville as well. But Westchester County charges the 4% local share, which then gets divvied up in Albany, shared with Westchester’s towns, villages, the cities of Peekskill and Rye, and their school districts

When Westchester first raised its sales tax by a penny years ago, 66% of the tax hike went to local governments, replacing burdensome property taxes for municipal services with consumption taxes. When Latimer won another penny on the tax in 2019, the cut for the locals was slashed to 30% while the cash-rich county government took 70% .

For the 2023-24 fiscal year, the village of Bronxville estimated sales tax revenues at $1.5 million, covering 8% of its annual budget. The Bronxville schools budgeted $600,000, about 1% of its budget.

Morton said he filed a Freedom of Information request with the state Department of Taxation and Finance, seeking access to the club’s quarterly sales tax filings, which show the jurisdiction to which the sales taxes should be credited.

An attempt by Tax Watch to obtain those filings through a Freedom of Information request were denied in December by the Department of Taxation and Finance, citing the confidentiality of the quarterly forms. It’s uncertain whether the same standard would apply to the Mount Vernon city comptroller.

Tax Watch's FOIL request unearthed state sales documents from 2002 and 2009, on which the club reported its address as 40 Locust Lane, Bronxville, NY, 10708. The club used that address on its federal IRS 990 report in 2021.

By 2012, the club's certificate of authority to collect sales tax listed the club's address as 40 Locust Lane, Mount Vernon, 10552. The club's address on Mount Vernon tax records is 24 Locust Lane.

The club's website, which gives its address as 40 Locust Lane, Bronxville, 10708, cautions drivers to use Mount Vernon 10552 when searching for directions on GPS.

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David McKay Wilson writes about tax issues and government accountability. Follow him on Twitter @davidmckay415 or email him at dwilson3@lohud.com.

This article originally appeared on Rockland/Westchester Journal News: Mount Vernon seeks answers from state on Bronxville Field Club taxes