A publication of the Kentucky Center for Public Service Journalism

Osborne prefiles a bill that clarifies a tax exemption on ticket purchases from nonprofit organizations

Speaker Pro Tempore David Osborne, R-Prospect, prefiled a bill last week that would maintain a tax exemption on the purchase of admission tickets sponsored by any non-profit, charitable or religious organization.

The bill seeks to address a section of the landmark tax reform legislation that passed during the 2018 Regular Session. The tax reform package, also known as HB 366, moved Kentucky from 33rd to 18th place on the Tax Foundation’s State Business Tax Climate Index, placed Kentucky as 10th lowest in the nation in personal income tax rates and also reduced the income tax burden for most Kentuckians, allowing them to keep more money in their pockets to spend however they wish.

David Osborne

“There was clearly never any intent for a tax on these types of purchases, but unfortunately the Department of Revenue has interpreted HB 366 differently,” Osborne said.

“What this bill does is clarify a portion of the law so that admission to events sponsored by these organizations are not taxed in the future. We will continue to evaluate other concerns and misinterpretations and make sure the bill is being interpreted as the legislature intended.”

The tax exemption would also be extended to property taxes on properties owned by public charities. Rep. Jim DeCesare, R-Bowling Green, filed a similar measure during the 2018 legislative session.

In March, the Kentucky Supreme Court ruled that the charitable exemption from taxes found in the Kentucky Constitution applied only to property taxes.

“Charities, which have a clear mission to help and improve communities, should not be taxed,” Rep. DeCesare said. “The way the courts and revenue department have interpreted the current language in the past have said elderly and disabled people living in non-profit living communities, such as assisted living facilities, retirement communities, church homes, places like Home of the Innocence, Cedar Lake Lodge, Wendell Foster and others are not subject to property tax.

“Without this clarifying language, the residents of the facilities will be hit with property tax bills they have not planned for or can afford. This would be devastating to these groups of individuals who are either living on a fixed income or have minimal or no income.”

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