New tax on nonprofits in Kentucky takes orchestra and other groups by surprise

Posted on: July 3, 2018

“At a time when he’s normally concentrating on the upcoming season of performances, Orchestra Kentucky Executive Director Scott Watkins is instead dealing with the impact on his ticket prices of a new state sales tax,” reports Don Sergent in Sunday’s (7/1) Bowling Green Daily News (Kentucky). “Welcome to Kentucky’s new nonprofit environment, one that has unexpectedly been altered almost beyond recognition by first a state Supreme Court ruling in March that limited charitable exemptions and then by House Bill 487, which passed in April and will turn Kentucky’s sales tax landscape on its head when it goes into effect July 1. The legislation’s new tax … makes nonprofits accountable for collecting and remitting sales taxes on items such as admissions to fundraising events, silent auctions and certain types of memberships or programs. For nonprofits accustomed to being exempt from sales taxes, the bill hit them like a sucker punch to the gut. ‘I’ve been in the nonprofit world for years, and it has always been that 501(c)(3) organizations are not taxed,’ Orchestra Kentucky’s Watkins said.… Danielle Clore, executive director of the Kentucky Nonprofit Network … said, ‘We will seek a legislative solution.’ ”

Posted July 3, 2018