Rev. Rul. 68-255

A social club was in operation for several years before January 1, 1966. Individuals who acquired membership in the club during this time were permitted to pay the initiation fees attributable to such memberships in several annual installments, some of which were paid before January 1, 1966, and some of which were paid after that date.

Pursuant to the Excise Tax Reduction Act of 1965, Public Law 89-44, Cumulative Bulletin 1965-2, 568, the tax imposed by section 4241(a)(2) of the Internal Revenue Code of 1954 on initiation fees paid to any social, athletic, or sporting club does not apply to initiation fees attributable to memberships beginning on or after January 1, 1966, the effective date of the repeal (with one exception not applicable here).

Held, since the installment payments made by the individuals after January 1, 1966 are attributable to memberships beginning before January 1, 1966, the tax imposed by section 4241(a)(2) of the Code applies to such payments, as well as to the installment payments made before that date.