Entertainment tax to affect nonprofits starting in Jan.

Wil Petty Staff Writer

November 25, 2013

A new state-backed tax expansion starting in January 2014, will affect nonprofit groups which had previously been exempt.

For area nonprofits, such as the Ashe County Arts Council and Olde Towne Jefferson Business Association, the new tax means higher prices.

“(The tax) will mean higher ticket prices across the board for anything the Arts Council sponsors, or anything that is held in one of our venues,” said Jane Lonon, director of the Ashe County Arts Council.

Not only will the nonprofits be responsible for the new tax, but if another organization uses the space of a previously exempt group, they will be responsible for the new tax as well. The tax is being used as another way for the state to generate revenue, also affected will be for-profit theaters which will now pay a 7 percent tax, instead of a 1 percent tax.

In turn, the tax will be passed on to the paying customer, which leaves nonprofits concerned.

“Because ticket prices will be higher does that mean people won’t be able to come, for example,” Lonon said. “Does it impact attendance? Does it impact people’s perception of what we are offering because of the higher price? There are a lot of implications, plus it is a lot more bookkeeping work.”

Lonon said the Arts Council plans to cover the tax by slightly raising the cost of its events. For example, a $12 ticket will now cost $13, while a $15 ticket will now cost $17, the plan is for all tickets to still cost an exact dollar figure.

“We’re not going to do nickels and dimes,” she said.

Other organizations, such as the Olde Town Jefferson Business Association and Mosaic Stage Company will also be feeling the pressure from the new 7 percent tax.

“(The tax) will impact us because it’s one more thing to keep up with,” said Stacy Maye, president of the OTJBA. “It’s one more thing that we have to make sure the logistics of are taken care of.”

Maye, a member of both of the Jefferson-based nonprofits, said that she feels that younger nonprofits will be more affected by the tax. The Mosaic Stage Company has been around for a year, while OTJBA has existed for eight years.

“This is charging more money that comes out of our pockets,” she said. “We don’t have much money to begin with.”

For the Arts Council, some of the implications have already been dealt with.

“We already collect sales tax on everything we sell here, all of our paintings, crafts and artwork,” Lonon said. “We’re used to filing sales tax, but this is just one more layer of what we have to collect and keep track of.”

While larger nonprofits will be able to handle the changes, the newer groups will have to prepare.

“It will be a cumbersome thing for smaller nonprofits,” Maye said.