A nonprofit publication of the Kentucky Center for Public Service Journalism

ACK urges General Assembly to act on legislation to allow more money to benefit local charities

Operators of charitable gaming organizations are urging the General Assembly to act on legislation that would allow more money to benefit local charities.

As state legislators gather in Frankfort for the 2019 Kentucky General Assembly legislative session, they are being asked to support the following tax-related bills:

•Eliminating the sales tax on bingo admissions that the state began charging last year.

•Eliminating the sales tax on charitable gaming supplies.

Last year, the legislature’s tax reform bill went into effect. The legislation made several major changes to the state’s tax code, including the application of sales and use tax on “participatory admissions”.

The Kentucky Department of Revenue (DOR) has interpreted that the sale tax on nonprofit admissions should be applied to bingo. But the Internal Revenue Service says that playing bingo is a wager and not an admission.

During 2018, the 16 lodges and 6,000 members of the Kentucky Elks distributed just over $1 million in contributions to veteran’s service programs, children’s educational programs, scholarships, and other charitable activities, said Kentucky Elks Association State President Charles Cunningham.

“This charitable work would not be possible without the income we receive from bingo and other charitable gaming,” Cunningham said. “The taxes on admissions recently enacted will have a real effect on the ability of our lodges to perform the charitable function that is at the heart of our order. We strongly urge the legislature to take action to remedy this situation.”

The Simpson County Literacy Center, which provides free learning opportunities to adults, raises $133,000 a year through bingo. But it must send $34,000  to Frankfort in taxes and fees, said Sally Maloney, the Center’s executive director.

“Getting rid of the sales tax would make a huge a difference to the Literacy Center and so many charities like us,” Maloney said.

Options Unlimited/Coalition for Workforce Diversity in Shepherdsville is an alliance of companies and individuals working together to create employment opportunities for people with disabilities. It relies on the funds it raises at bingo to support employment and day program services for adults with disabilities.

But more and more, the money raised by the charity is going to pay taxes in Frankfort, said Director Willie Byrd.

“The sales tax on bingo admissions has doubled the amount of dollars we send to the state each quarter,” Byrd said. “In the past six months, one dollar out of every three we made went to the state.”

Charitable gaming – in the form of bingo, pull tabs and electronic pull tabs – provide funds in communities across Kentucky for public and private schools, veterans organizations, high school bands, youth sports, literacy, Boys & Girls Clubs, theater groups, the developmentally disabled, healthcare services for the needy, Special Olympics, senior services, disabled children, fraternal and service organizations, history groups and museums, the homeless and more.

Eliminating the state’s six percent sales tax on charitable gaming supplies would also allow charities to keep more of the money they raise.

Charitable gaming organizations pay the six percent sales tax on all gaming supplies – bingo cards and games, pull tabs, etc. – purchased by their organizations. In 2017, charitable gaming organizations purchased nearly $15 million in gaming supplies, paying approximately $900,000 in sales tax.

Allied Charities of Kentucky (ACK) is a statewide coalition of charitable gaming operators, vendors and others who speak with a common and united voice regarding issues, regulations and legislation that impacts charitable gaming in Kentucky. For more information, click here.

Allied Charities of Kentucky

Related Posts

Leave a Comment