Non-profits impacted by new sales tax

Christy Howell-Hoots - [email protected]
Kayla Storer, employee at Pit Stop Tobacco in Maysville, stands at the counter. A notice pertaining to the cigarette tax is visible for incoming customers. -

An expanded Kentucky sales tax will affect several services, as well as all non-profit organizations across the state beginning Sunday.

On July 1, the 6 percent sales tax now paid on most goods will also include extended warranty services, facility and event admission fees, indoor skin tanning services, janitorial services, labor charges for installation or repair of tangible personal property, digital property or services sold, landscaping services, limousine services, non-coin operated laundry/dry cleaning, non-medical diet and weight reducing services, pet care services, rentals of campsites and veterinary services, according to a website set up by the Kentucky Department of Revenue, taxanswers.ky.gov.

Among those taxable services is anything sold by non-profit organizations, according to State Rep. John Sims Jr.

“It will, indeed, affect non-profits,” Sims said. “Anything they sell at auctions, they will have to pay a sales tax on.”

Sims said he disagrees with the bill.

“It’s a bad bill,” he said. “It was rushed through without anyone thinking about the consequences. We need real tax modernization in order to make Kentucky competitive and this isn’t it.”

According to Sims, the excess money from the sales tax will be used for the state’s general fund.

Mason County Hospice of Hope Executive Director Kavin Cartmell said she expects it to affect fund-raising for the Hospice of Hope, but she is still unsure about the extent.

Cartmell sat through a webinar on Thursday in order to find out more information about the tax.

“There are still a lot of unanswered questions, but we know that, after July 1, we will be required to collect a 6 percent sales tax on all events we hold to raise money,” she said. “That means our gala we do each year and if we hold a silent auction.”

Cartmell said she understood, from the webinar, that organizations will have to register online and choose whether they would want to turn in the sales tax monthly or quarterly.

“The way I understood it is that we’ll pay tax on our gross sales receipts and we can turn it in either monthly or quarterly,” she said.”

According to Cartmell, the most upsetting part about the bill, for her, is the way it was handled.

“This was passed in April and it’s going into effect on July 1,” she said. “It’s bothersome how quickly it went through without really giving people a chance to know more about it.”

Cartmell said she is unsure how Hospice of Hope will handle the sales tax.

“We don’t know how we’ll handle collecting the sales tax just yet,” she said. “It’s too early to know, but the administration burden is going to be huge.”

Town and Country Animal Hospital Office Manager Judy Kirk said the sales tax will be collected on all services offered by the clinic.

“We have to charge a sales tax on everything now,” she said. “Everything provided inside this building will have a sales tax on it.”

According to Kirk, that includes exams, medications, boarding and grooming of small animals.

“There’s been a lot of confusion and misinformation,” she said. “The only thing I can say is that we will now have to charge a sales tax to consumers.”

The tax, however, does not include services for farm animals, according to Sims.

Even events such as fishing tournaments and 5K run/walk entry fees will have a sales tax included on them.

Vanceburg Mayor Matt Ginn said the city holds a fishing tournament each year, so he has been looking into the new law.

“It won’t have that much of an affect on us, just because we only hold it once a year and we don’t have a lot of people who enter,” he said. “Chances are, we’ll just absorb that sales tax. It will be included in that entry fee and we’ll pay it.”

Director of the Humane Society of Buffalo Trace Rebecca Cartmell said it will affect the annual “Run for your Life” 5K run/walk.

“It will lower our income by 6 percent,” she said. “That will have a negative impact.”

Some organizations have already contacted consumers to let them know about the new tax.

The Maysville YMCA sent letters to members, and placed a notice on the front door, about the sales tax and how a 6 percent tax will be charged on their accounts, beginning on July 1.

In addition to the sales tax, a cigarette tax will also take effect on July 1.

According to a representative with the Pit Stop Tobacco store in Maysville, the tax will increase 5o cents for a pack and $5 for a carton of cigarettes.

“I don’t think it will affect our sales,” the representative said. “Our prices are going to go up. We’ll just collect the tax and send it in.”

More information on the new tax can be found at taxanswers.ky.gov.

Kayla Storer, employee at Pit Stop Tobacco in Maysville, stands at the counter. A notice pertaining to the cigarette tax is visible for incoming customers.
https://maysville-online.com/wp-content/uploads/2018/06/web1_Cigarette-tax-1.jpgKayla Storer, employee at Pit Stop Tobacco in Maysville, stands at the counter. A notice pertaining to the cigarette tax is visible for incoming customers.

Christy Howell-Hoots

[email protected]