Legislative Agenda 2014
Sustain support to the North Carolina Arts Council
Grants funding = $5,709,723
Distributed to all 100 counties
Operations and Personnel = $1,453,655
A+ Schools, SmART Initiative, Technical Assistance
Arts Education Policy – H127/S68
H127 passed House in 2013 by a margin of 98-19
Sales Tax on Amusements
From Advocacy Matters – June 11, 2014
H1201 which moved through the House of Representatives this week clearly proves that the issue of nonprofit organizations being required to collect sales tax on “amusements and entertainments” is clearly not a closed case.
Last year, the General Assembly expanded the sales tax base to require nonprofit organizations to collect sales tax on admissions. On Thursday, June 5, the House narrowly voted to exempt one such event, county agricultural fairs, from collecting the tax. (H1201) The issue exposed a disagreement about the sales tax policy – those who wanted to help the small organizations that run the fairs (and many who also wanted to exempt the arts) and those who didn’t want to set the precedent of repealing parts of last year’s major tax overhaul. Rep. Bryan Holloway, R-Stokes, argued that the state should relieve the local fairs from the burden of collecting and submitting the tax. “These fairs need to stick around, and they’re a big, big deal for our small communities,” he said. But some top Republicans, including Reps. Julia Howard of Davie County and David Lewis of Harnett County, who helped draft last year’s tax reform legislation, opposed the measure. “This is the beginning of unraveling all of the hard work that you did last year,” Howard said. Rep. Edgar Starnes, R-Caldwell, the House majority leader, also spoke against the bill, saying the General Assembly made a policy decision last year to treat taxpayers the same.
June 10th Session
On the 3rd reading of H1201 at the June 5th Session, an objection was raised to the issue and so the bill which would have exempted local fairs from collecting the sales tax was required to be brought forward to the House Floor on Tuesday, June 10. In the interim, discussion was rampant on whether an amendment should be offered that also exempted non-profit arts, cultural, and historic organizations.
What followed was one of the most interesting debates of this “short” session, with Republicans and Democrats expressing their individual views rather than a party line. While H1201 narrowly passed 60-54 on second reading on June 5th, the bill failed on June 10th by an equally narrow margin of 57-60. You can see how your Representative voted at http://www.ncleg.net/gascripts/BillLookUp/BillLookUp.pl?Session=2013&BillID=H1201&submitButton=Go. But you won’t necessarily know how to interpret their vote. Were they voting for county fairs or against the bill not including the arts? Were they voting to intentionally unravel the “no exemptions” policy of the tax law or were they voting to hold the policy together?
We can tell you that if this is an issue of concern to you or your organization, you should absolutely listen to the debate on H1201 – Click Here to Listen. Pay particular note to the eloquent speech by Representative Becky Carney who is directly responsible for raising the issue of arts nonprofits in the context of H1201.
Next year may be the year of Art and Agriculture. Even though many organizations are in the throes of implementing the onerous tax policy, particularly challenging for medium and small budget organizations, the sales tax on amusements will likely be a key agenda issue in 2015.