Mon June 10, 2013
NC Tax Proposals Could Hurt Nonprofits
Proposals to overhaul North Carolina's tax code could discourage people from giving to charities, turn nonprofits into tax collectors, and make it more difficult for some organizations to provide services. Those are a few concerns the N.C. Center for Nonprofits raised Monday.
The exact changes that nonprofits don't like vary between the House proposal and the two Senate ones. But Jane Kendall, president of the N.C. Center for Nonprofits, said here's the consistent theme: all three overhauls would put nonprofits in a worse spot financially, "which could have a huge impact on the ability of nonprofits to continue serving their local communities and to try to meet the increased demand for services."
On a conference call with reporters, Kendall said that increased demand is a lingering effect of the recession. As the state government has cut back, nonprofits have played a bigger role in providing health care, early childhood education and other services.
Under the two Senate plans, nonprofits would have to start charging sales tax for some or all of their services. David Heinen is the Center for Nonprofits' director of public policy.
"The particular concern is that many of these services are provided to individuals and families who have limited means to pay for it and who would not be able to pay anything more than what they're currently paying," Heinen said.
He said that means nonprofits may have to cover the sales tax themselves under the Senate plans. That's not part of the House plan.
But all three proposals eliminate or cap certain deductions for charitable giving. Heinen said that could discourage people from giving as much.
Lawmakers say those changes are part of their plans to create a simpler tax code with fewer loopholes.