When people sat down last weekend at the St. Jerome Picnic in Fancy Farm to play Bingo, for the first time ever, 3 cents on every 50- cent Bingo card they bought went to the state of Kentucky.
That’s money that will be diverted from shelters for the homeless and battered women, from people who need help paying their electric bills, from families whom the nation’s economic recovery has passed by, and from mission trips parishioners take to help those less fortunate.
And it’s all because the state legislature, in a move to grab cash while giving a tax break to the wealthiest, extended the sales taxes to more goods and services including admission to events.
That, combined with a separate ruling from the Kentucky Supreme Court that stripped some tax exemptions from non-profit groups — and the way the Bevin administration is applying the new law and the court case — has put some non-profit groups in quite a pickle.
In short, what’s going on here is all three branches of Kentucky government have conspired to stick it to churches and charities.
Part of the problem is that Republican legislators pushed through a largely un-vetted tax reform package in the last day of the 2018 legislature as the clock in Kentucky’s Capitol neared what is celebrated annually in Frankfort: “sine die.”
That’s Latin for “Thank God, they’re going home.” Or something like that.
No one had time to read the dense, 350-page tax bill that is chock-full of stuff like this:
“There shall be allowed a nonrefundable and nontransferable credit against the tax imposed by Sections 57 or 58 and 77 of this Act, with the ordering of the credits as provided in Section 105 of this Act, for any taxpayer that, on or after January 1, 2018, pays an ad valorem tax to the Commonwealth or any political subdivision thereof for property described in KRS 132.020(1)(n) or 132.099.”
They also didn’t have time to figure out how it would interact with the Supreme Court case that found some non-profits had been under-taxed for years because of an earlier misreading of state tax law.
Legislators now say they are going to fix the problem when they go back to Frankfort in January, but until then, churches like St. Jerome Catholic Church in Fancy Farm and any charity that holds golf scrambles and galas will have to give 6 percent of their take on some activities to the state.
This, in a state that since Matt Bevin took over as governor has been intent on harming the very people that many of these organizations are trying to help. Over more than two years, Bevin has pushed to cut access to health care and tried to make people who can’t afford it pay premiums and co-payments.
Churches and charities are only now beginning to figure out how new taxes, combined with the Supreme Court ruling that limits the constitutional tax exemption for charities and churches to a property tax exemption, will af- fect them.
And they’re getting some pretty odd — and sometimes conflicting — information from Bevin’s revenue department as they work through this.
The full admission to charity events is taxed.
So if you go to a charity dinner, where for your $200 admission fee they give you a $13 rubber chicken breast and a stalk of broccoli, the non-profit group is going to now have to cough up $12 in taxes that would go to help its cause, or charge you more money for taxes.
And if your church holds a Bingo to raise money for its missions, like St. Jerome, they have to charge 6 percent on the sale of every Bingo card.
That’s unless the church charges admission beyond the cost of the cards. Then, the admission fee is taxed at 6 percent, but the individual cards are not taxed.
Pull-tabs — the things that are often sold at Bingo games and Catholic Church picnics that are kind of like low-tech lottery scratch-offs and often have a bingo theme — aren’t taxed.
But admission to a charitable silent auction is taxed.
Prize wheels aren’t taxed. Charitable golf scrambles are.
Essentially, what the bill has done is create a mess that nonprofit groups and churches are still trying to figure out nearly a month after the bill took effect.
The Rev. Darrell Venters, pastor at St. Jerome, said the topic of taxes has been much discussed over the last few weeks at the parish in rural Graves County. Fancy Farm is one of the first big picnics in the state to be held under the new tax scheme.
He wouldn’t say how much the picnic nets each year, but you can bet that selling nearly 10 tons of smoked pork and mutton and two days of Bingo games brings in a pretty tidy sum.
“It’s a good chunk of money. It’s a very profitable fundraiser,” he said.
Fancy Farm, known for its annual political speaking event, isn’t like a lot of church picnics around Louisville because it doesn’t rely on the un-taxed prize wheels — in fact you’ll only find a couple of them for kids there. It makes its money off Bingo games.
Venters said it’s impossible to charge admission for Bingo because of the way the open air game is set up there. And he said organizers don’t want the hassle of charging 50 cents, then having to calculate the 6 percent tax, and then having to make change.
So, he said, the church has decided that it will slash the price of the cards by 6 percent and then apply the tax at that rate — essentially justtakinga6percentloss.
House Speaker Pro Tem David Osborne thinks the revenue department is, in part, applying the law incorrectly, but he acknowledged that in drafting the law, the legislature failed to consider how it would work with the Supreme Court ruling that was handed down less than two weeks before the legislature ended.
Both House and Senate leaders have agreed the tax on admission to charity events was an error and needs to be fixed as soon as the General Assembly meets in January, Osborne said.
It can’t come soon enough for the good people at St. Jerome.