Decision saves KPA from collecting $9,960 from our member newspapers and remitting it to the state coffers
If you’ve read anything about the 2018 legislature, then you’ve read about the General Assembly’s attempt to revise the state sales tax, especially trying to tax some services. But the knee jerk reaction of the legislature to get something on the books before the session ended, threw turmoil into the process.
Yeah, they added sales tax on a number of services — barbers, auto repair, exercise facilities come to mind — but then digging deeper into the language alerted reporters found much more. Golf courses were faced with a sales tax on green fees and carts, as well as a tax on country club memberships. That was just the beginning. Soon after the end of the session, non-profit groups — i.e., KPA — were faced with a sales tax on membership dues as well. And then there was 6 percent put on anything dealing with “admission and entertainment.” Seems the Department of Revenue had free rein on deciding what that meant and it appeared there would be a sales tax added on events such as convention banquets and luncheons.
That wasn’t news we wanted to hear, especially not about adding sales tax to membership dues.
We were getting the software process together to invoice newspapers for 2019 dues when we were reminded we hadn’t added the sales tax dues provision. A quick email to our CPA simply asked what was the best way to handle adding the sales tax to dues and then to events such as our 150th anniversary.
The phone call response from our CPA was the best news of the week. Apparently the Department of Revenue had a change or heart (or perhaps enough heat from legislators who were being berated for such foolish language) that we will not have to charge sales tax on dues. That’s good news for you and good news for the KPA Business Department. Bonnie and Holly won’t have to keep track of sales tax payments and then remit same to the state.
In dues from our weekly and daily newspapers, that would have been about $9,960 we would have collected as the sales tax on dues and had to remit that to the state. So the state’s reposition on its initial reaction saved you, our members, that $9,960.
There was another bit of good news from the CPA. Initially, “admission” to an event appeared to mean we would have to charge you six percent on the $75 registration fee to come to the convention. Now there’s a clarification. If we can show the registration fee is used to allow you to attend “educational” programs, then there won’t be the sales tax added to that. I can easily argue that anything Kevin Slimp or Peter Wagner or Ed Henninger or the other speakers offer will educate you and therefore the state won’t be getting six percent from you through us for you to learn something.
There was one downside. We’ll have to charge six percent sales tax on the meals at the convention but there’s a little bit of a savings on our end. If we can get a “sale for resale certificate,” then the hotel won’t be able to charge us six percent as well. If they could, that would be double-dipping by the state — the hotel charges KPA 6 percent and KPA charges its member 6 percent on the 150th Gala dinner and the two awards contest events on Friday, January 25.
Hopefully, the legislature will keep its promise and rephrase the language to make sure sales tax on non-profit organizations was not meant to happen. I won’t hold my breath til then, however.
Here’s a story from earlier this month by Don Sergent with the Bowling Green Daily News under the title: Nonprofits look to Frankfort for relief from sales tax mandate