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.
We first started using First Nonprofit’s Unemployment Savings Program when we were a small startup nonprofit. We didn’t have an HR department and needed expertise in the event that an unemployment claim was made. We knew we were eligible to be a reimbursing employer, but weren’t sure how to navigate that process. They made it easy to set things up, plan for, and then manage claims when they came at a very reasonable cost. The amount of time and stress they’ve saved us dealing with all this has been worth way more than the cost. We’ve now grown to a large nonprofit and do have an HR department but have no plans to stop using their services. I highly recommend them to every nonprofit I come into contact with!
Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.
Because INCS advocates for the operating conditions that allow charter public schools to provide high quality public education, partnering with First Nonprofit was an easy decision. First Nonprofit’s unemployment programs provide our member schools two operating elements crucial to their ability to provide high quality public education: savings and budget certainty. Capable, committed teachers are the key to student success. By participating in the unemployment insurance savings plan, charter public schools gain peace of mind and are able to invest more money in their teachers.
It has been our sincere pleasure to maintain a strong, vibrant business partnership with First Nonprofit. We greatly admire their strong industry knowledge, technical expertise, constant professionalism, knowledgeable and dedicated staff. They are always extremely responsive, personable and provide us with the necessary guidance and recommendations on a numerous variety of employment scenarios.
NYCON members who use First Nonprofit’s programs enjoy enduring savings and improved efficiency. Our association knows that success, because from the beginning, we achieved the same great benefits. Great savings, seamless technology, and responsive service. NYCON highly recommends First Nonprofit’s remarkable unemployment solutions.
Visually Impaired Preschool Services has been a client of First Non-Profit since it was first offered as a benefit of VisionServe Alliance. We completed a thorough evaluation of cash savings to our agency before taking advantage of this wonderful benefit and it has been a very wise decision. Our experience with the processes from accounting to claims have been professional, expeditious and easy.
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