Like others around the state, nonprofits in Johnson County are now subject to a six percent sales tax for admissions fees, even for fundraisers. The effects, representatives said, have been varied.
Mountain Homeplace manager Russell Honeycutt said that, for the living historical museum near Paintsville Lake, applying the tax has been a smooth transition.
“Our gift shop is already taxed, and everything runs through the gift shop. Now, for admissions, we just have the register apply the tax,” Honeycutt said.
Honeycutt said that the new taxes may create trouble for sales not run through the gift shop, such as admissions to the plays at the outdoor amphitheatre, including the upcoming productions of “Beauty and the Beast.”
For the nonprofit Whiskers or Wags, which operates the Johnson County Animal Shelter, the new taxes have caused new strife, and in more ways than one.
Shelter manager Lisa Trusty-Roberts said that not only will tickets for future fundraiser events be taxed, possibly denting turnout and revenue for the shelter, but the taxes also apply to shelter adoption fees, currently set at $75 for dogs, $50 for cats and kittens, costs which include spaying or neutering, vaccinations, dewormer, flea and tick prevention and more.
Rather than add the taxes to the fees and risk seeing raised costs turn away potential adopters, Trusty-Roberts said they have chosen to slightly lower the fees and build the taxes in, resulting in unchanged final costs for the families adopting pets.
“We were barely breaking even on the veterinary costs to begin with,” Trusty-Roberts said. “Now we’re absorbing the cost (of the taxes).”
Trusty-Roberts said that sales taxes now also apply to small animal veterinarian costs, and while the shelter has a tax exemption for services they buy, pet owners in the general public do not — and the new taxes mean an unwelcome new disincentive for spaying and neutering and other important animal care.
“It goes right in line with Kentucky being ranked number 50 in animal welfare,” Trusty-Roberts said.
Already, Republican House Speaker Pro Tempore David Osborne of Prospect has pre-filed a bill to clarify and amend the language of the tax law to re-exempt admissions fees for nonprofit fundraisers.
“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 in a statement. “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.”