January 16, 2014
Nonprofits in North Carolina are growing concerned about a sales tax expansion that could eat into the revenue of ticket sales for museums, sports games and cultural events. Many of the organizations rely on the income from ticket sales for financial support, so a 7 percent bite could be costly.
"If you were giving $100 worth of tickets for a $100 contribution, then you've got to pay the tax on that or whatever amount that may be," Thalian Hall Center for the Performing Arts Executive Director Tony Rivenbark told North Carolina's NPR affiliate. "You know, we have people that give a $5,000 gift or a $10,000 annual gift, then they may get several hundred dollars worth of tickets for that. But we're going to have to pay 7 percent on that several hundred dollars worth of tickets."
Rivenbark said that he was also concerned about the indirect costs of the tax increase, such as additional bookkeeping.
Nonprofits often struggle with state taxes
Nonprofits may also find themselves taking a hit from state unemployment tax pools. While nonprofits are exempt from federal taxes related to unemployment, they are still responsible for meeting the state obligation. States make the actual payments to unemployed individuals but not all businesses are able to cover their own costs. The pooled contributions mean that even nonprofits with no unemployment turnover still pay into the state system.
While for-profit businesses have no other options than to pay the tax, nonprofits can opt out of state UI pools and become self-reimbursing employers. Under this designation, nonprofits are responsible only for the actual amount of money paid out in claims to former employees. A nonprofit with no claims would have no costs.
However, opting out of the state program can leave nonprofits open to unexpected costs if they suddenly experience a large turnover. To avoid this situation, organizations should take advantage of other options such as a UI savings programs. Saving programs through an experienced provider allow nonprofits the cost savings of opting out with less risk. Once members of the program, organizations have access to claim protection if unemployment spikes.
For information on how your organization can cost-effectively meet its unemployment insurance needs, contact First Nonprofit Companies at FNCUI@firstnonprofit.com or visit www.firstnonprofitcompanies.com.
Ready to chat? Get in touch today to request a no-obligation savings evaluation.
First Nonprofit has saved us so much money over the state’s program. We had one little glitch with the state recently and we contacted FNP immediately. FNP staff called us back immediately and moved to remedy the problem.
First Nonprofit has been a great partner. They have helped us saved hundreds of thousands of dollars! They have awesome resources for our nonprofit organization. Thanks for the partnership.
Life is certainly busy these days but having business partners like First Nonprofit has made some of the process hassle free. We have worked with this team for years. When we changed payroll systems, they outlined every step. I think this team is terrific and I know they get the job done! Thank you, Cruz, to all the team at FNP.
FNP has helped our agency to save thousands of dollars every year on our unemployment coverage. The service is phenomenal, and we are thankful to their team as our partner. My experience working with Marshall on the advocacy around UE for nonprofits was also a highlight as someone who teaches advocacy and lobbying for nonprofits. Really, your whole team is top shelf, so thank YOU!
Chicago Children’s Theatre has greatly benefited from our partnership with First Nonprofit, and I have always enjoyed working with the staff on our filings and any complicated questions. I would not hesitate to recommend First Nonprofit to fellow nonprofits. We’re very happy customers.
FNP is a great resource for Daniel Kids. To have a TPA that we can count on to take point on not only managing our unemployment claims, but to support and guide any protest hearing, is invaluable. All the professional support staff we have worked with have been excellent, very knowledgeable and responsive. We are grateful for the help and support, thank you.
When I first began in my position at my organization, I hadn’t had experience working with a company like FNP. The staff was so patient and helpful in helping to explain the benefits of First Nonprofit. Anytime I reach out with a question I receive a quick, clear, and thorough response. I’m so thankful that we decided to partner with FNP. Their excellence in customer service, coupled with their variety of packages frees us up to truly serve our staff and community with a peace of mind knowing that our organization is protected against unanticipated unemployment insurance expenses.
First Nonprofit gets an A+ in my book. You are so easy to work with & very knowledgeable! Whether it is my quarterly correspondence with Kim or my random interactions with Dawn about a bond … I am so pleased that I get to work with such a helpful company. Thank you!