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Fred Windish

Business Privilege Taxes?

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Just noticed a new story on the Allentown Morning Call website. I immediately thought of the Cadets. There is a taxing conflict between the City of Allentown and the home of the Parkettes National Gymastics Team, an organization somewhat similar to the Cadets.

Seems to me, a new issue for the Cadets to deal with COULD present itself. Not good in a year like this!   Perhaps not, if the Cadets have already been paying a Business Privilege Tax to Allentown, or it’s already clear they have no obligation to do so. 

I’d like to think non-profits do not pay this tax.  I have no insight if other corps already deal with this, but know I wouldn’t want such a surprise thrown at the Cadets right now.

www.morningcall.com

 

 

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"The board determined that the Parkettes does not advance a charitable purpose because it primarily serves people who can afford to pay for its services."

The bold in the quote is what Cadets need to be very aware of!

Edited by Stu
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1 hour ago, Stu said:

"The board determined that the Parkettes does not advance a charitable purpose because it primarily serves people who can afford to pay for its services."

The bold in the quote is what Cadets need to be very aware of!

You make a good point. If Cadets can prove that tuition only pays a portion of what it costs to participate, they could be all set. Another factor would be how much YEA contributes to the community. I belong to a camera club and to keep the organization from paying property tax for the building, we have to do a certain number of charitable work such as offering free photography services to local non-profits or donating photos for fundraising purposes, make presentations to nursing homes or schools, etc. It cannot be work related either, for examples, a teacher by profession cannot use photostaken during school time though after school hours do count.  

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35 minutes ago, Tim K said:

You make a good point. If Cadets can prove that tuition only pays a portion of what it costs to participate, they could be all set. Another factor would be how much YEA contributes to the community. I belong to a camera club and to keep the organization from paying property tax for the building, we have to do a certain number of charitable work such as offering free photography services to local non-profits or donating photos for fundraising purposes, make presentations to nursing homes or schools, etc. It cannot be work related either, for examples, a teacher by profession cannot use photostaken during school time though after school hours do count.  

I agree that hopefully YEA, as a whole, can show they are mainly functioning as a charity helping the under-privileged, and that the Cadets performance outlet for those who can afford to pay is but a smal percentage of YEA. However, we all know that the touring DCI corps is the main thrust and focus for YEA. And there is no denying that most of the 150 Cadet spots each year are really designed for those who can afford to pay to be involved.

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3 hours ago, Stu said:

"The board determined that the Parkettes does not advance a charitable purpose because it primarily serves people who can afford to pay for its services."

 

 Sounds to me like this definition would likewise apply to a large number of political officials on various boards from coast to coast too.... ie, they primarily " serve people who can afford to pay for its services ".:pirate:

Edited by BRASSO
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12 hours ago, Stu said:

"The board determined that the Parkettes does not advance a charitable purpose because it primarily serves people who can afford to pay for its services."

The bold in the quote is what Cadets need to be very aware of!

Yes, they need to be aware. 

That said... Cadets marchers do not pay for their services.  Their payments probably only cover 25%-30% of the cost.  At that level, we cannot even speculate as to whether marchers could "afford to pay" the full cost of those services.

If this nebulous "afford to pay" standard were to become valid legal precedent, colleges would have to pay tax on their donations.  Hospitals too - after all, they primarily serve people who can afford to pay (copayments) for their services.

This is just an attempted end run around the non-profit designation by a municipality that cannot balance their own budget.

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11 minutes ago, cixelsyd said:

Yes, they need to be aware. 

That said... Cadets marchers do not pay for their services.  Their payments probably only cover 25%-30% of the cost.  At that level, we cannot even speculate as to whether marchers could "afford to pay" the full cost of those services.

If this nebulous "afford to pay" standard were to become valid legal precedent, colleges would have to pay tax on their donations.  Hospitals too - after all, they primarily serve people who can afford to pay (copayments) for their services.

This is just an attempted end run around the non-profit designation by a municipality that cannot balance their own budget.

Bingo! Follow the money.

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16 minutes ago, dans said:

Bingo! Follow the money.

Exactly.  But it appears the city is capable of succeeding here. At least, selectively.

There is no doubt Allentown has created its own financial hole after at least a decade of bad decision-making. If you recall, the Mayor during the “YEA” years downtown now sits in Federal Prison serving a 12 year sentence for funny business in office. Numerous other bad decisions too. They just passed a 23% tax increase on residents!

For this particular tax, they are going back 10 years. It’s a desperate municipality that will seek new revenue sources under every rock. Certainly a situation to consider going forward. Both for YEA and DCI.  

 

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29 minutes ago, cixelsyd said:

Yes, they need to be aware. 

That said... Cadets marchers do not pay for their services.  Their payments probably only cover 25%-30% of the cost.  At that level, we cannot even speculate as to whether marchers could "afford to pay" the full cost of those services.

If this nebulous "afford to pay" standard were to become valid legal precedent, colleges would have to pay tax on their donations.  Hospitals too - after all, they primarily serve people who can afford to pay (copayments) for their services.

This is just an attempted end run around the non-profit designation by a municipality that cannot balance their own budget.

You make valid points, and I too thought about hospitals and colleges, but if you live in the Boston area like I do, the endowments of Harvard, M.I.T., Boston College, Boston University, Mass General, Brigham and Women’s, etc. are pretty substantial. Each also needs municipal services. To be fair, many nonprofits in Boston make donations to the city in lieu of taxes, and many of these institutions provide valuable services to the community, but as it gets more difficult to balance municipal budgets, difficult decisions have to be made. That being said, why did Allentown choose to target the Parkettes? When it comes to local politics, it could be to set an example. It could also be that City Official “Joe Jamoca’s” favorite niece Clarabelle was not accepted by the Parkettes and a loophole of a law was discovered. 

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