Effective July 1, 2018, Kentucky law will require nonprofit organizations to collect sales tax from supporters of special events and some programs. Nonprofits were already required to collect sales tax on admissions to museums, concerts, art exhibits and a like. House Bill 487 combined with a recent Kentucky Supreme Court decision expands the sales tax to fundraising, special events, recreational programming, and summer camps. The result is taxing the individual supporters of thousands of charities across Kentucky. H.B. 487 will supersede the prior law if there are conflicts between them.
“This law will have huge implications in the way nonprofits do business in the Commonwealth,” said Fausz.
Nonprofit executives having difficulty understanding how this law might impact their organization’s ability to raise funds or what the implications might be should reach out to Colleen Fausz or another member of DBL Law’s Nonprofit and Tax Exempt Organizations practice group.
