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January 2020

Speak Now Or Forever Hold Your Peace

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By Jared Williams
Managing Director
GOLF USA TEE TIME COALITION

If you recall my last column, “Tee Time is Money,” I revealed the state of Texas comptroller of public accounts had ruled against an online tee time agent for failing to pay taxes associated with barter tee times to the tune of $1 million. Since then, I worked with the comptroller’s office to find out which company, specifically, was the subject of this audit. The amount of this tax liability led us to believe this was a ruling against one of the larger online tee time agents, but the description of the vendor as Texas-based may have been a little misleading.

The company that must pay the penalty in this situation is GolfNow.

Texas Comptroller of Public Accounts’ three-year audit of GolfNow resulted in an administrative law judge finding the OTTA was not entitled to a sales tax waiver on reservation fees because those taxes were never assessed.

GolfNow did not collect any sales tax on reservation fees from barter transactions that took place during the audit period (April 1, 2011 to September 30, 2014.)

So if you are a GolfNow client, now may be the perfect opportunity to ask them about this ruling and any changes they plan on making to this process going forward. 

Speaking of changes. two have become one. The golf industry experienced a seismic shift in the online tee time space as GolfNow announced its acquisition of EZLinks/TeeOff.com.

For years, EZLinks has been the clear-cut No. 2 player in a space where GolfNow and EZLinks collectively controlled at least 75 percent of market share. GolfNow is certainly flexing its muscle in this acquisition.

Other companies have been put on notice, but it will be interesting to see how all of this turns out for both companies, their golf course clients and the industry in general. I imagine more details about this deal will be available in the coming months. EZLinks, as a software company, has successfully developed its own course management software and acquired a few software companies of its own. GolfNow, similarly, has tried to develop its own course management software, albeit with a few hiccups. But GolfNow has remedied this by continually acquiring other software companies.

This isn’t unique to the golf industry, as many other software companies have been acquired, sold or are currently for sale. The sizeable market share that is the result of this acquisition is what makes this so remarkable. EZLinks CEO Gary Cohen had vowed to build EZLinks into a company that could and would eventually replace GolfNow as the number one OTTA/GMS in the industry. With this acquisition, that is no longer a possibility and GolfNow has an even stronger stranglehold.

But at the end of the day, the companies have to continue to work to deliver quality software and service to golf courses. If that doesn’t happen, it doesn’t matter how large the company is or how many courses it acquires. If the product doesn’t meet the needs of its clients, there will be some defectors.

One thing I’ve learned in this industry is that quality always wins out over quantity. I’m anxious to see what becomes of this.

“If anyone sees any reason why these two should not be wed, let them speak now or forever hold their peace.”

What are your initial reactions to this news? Please do not hesitate to contact me.


 

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