Communicate. Mobilize. Repeat.
Kentucky nonprofits were hit with two new sales taxes this year due to hastily passed, last-minute legislation and a commonwealth supreme court decision. A surprise to nonprofits and legislators alike, nonprofits must now charge sales tax on admissions to events and on items purchased as part of fundraising, such as buying items at live and silent auctions. Worse still, the tax obligation kicked in on July 1, mere weeks after enactment, and charitable organizations have experienced “significant confusion, frustration and even anger,” according to Danielle Clore, head of the Kentucky Nonprofit Network (KNN).
But the state association of nonprofits isn’t just complaining about the injustice of it all. It is communicating strategy and messaging as it works to mobilize the entire nonprofit community in Kentucky to repeal the new taxes.
The Legislature is out of session for the year, but bills are being pre-filed for consideration during the 2019 session. Legislation has been proposed to fix the tax on admissions, but so far none has been introduced to repeal the new tax on fundraising sales. In a recent action alert to nonprofits, Clore wrote: “KNN believes it is important to fix both issues and we will all need to use the interest, support and momentum gained with the General Assembly to push for the best tax policy solution for nonprofits and the people and communities we serve.”
That means nonprofits talking to legislators anywhere and anytime possible. KNN developed a one page-summary on the issue and will soon be hitting the road with regional public policy forums to discuss these and other legislative priorities.
The state association also developed a multi-step action plan that it shares so every nonprofit can engage in alignment with others. First, KNN advises that nonprofits reflect on how the new taxes will affect their operations.
Second, KNN asks, how do the taxes impact those “who you serve and how you serve them?” They explain that this is critical information because every industry impacted by the broader sales tax law is arguing that the new law is a burden on them. “The difference for nonprofits,” KNN writes, “is that this burden impacts the individuals and communities you serve in a very direct way. It’s not merely an inconvenience for your nonprofit - the administrative burden and/or loss of donations may mean some individuals don’t receive services, or receive fewer services, etc.” And KNN gives an advocacy heads up: “Being able to articulate this is essential.”
Next, KNN urges nonprofits to communicate with legislators how this issue is directly impacting their constituents, as in – when talking with legislators, give “less focus on your nonprofit, more focus on THEIR CONSTITUENTS/those you serve.”
Another key bit of advice addresses the desired outcomes of the advocacy effort. Kentucky nonprofits need both sales taxes repealed, so KNN is urging nonprofits to press legislators for the two fixes; nonprofits need to raise the problems created by each tax because, as KNN states, “We want legislators to be familiar with both issues” and know that fixing one won’t be enough to satisfy the nonprofit community.
The next stage is worth quoting in its entirety because it’s true for most nonprofit advocacy: “Communicate with your legislators now and again after every event where you have to collect and remit sales tax - every time until the issue is resolved.”
Finally, the state association knows that it can only lead an advocacy campaign based on the best information available. It concludes by asking nonprofits to “share your sales tax stories with us so we can also communicate the impact this issue is having on the nonprofit sector AND Kentuckians.”
The change in sales tax law in Kentucky was largely inadvertent. But the strategy for reversing the positions of legislators is quite deliberate.
