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Is Your Association Exempt from
Taxes? |
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Its getting close to tax filing time for
all soccer moms and dads. However, for KYSA affiliates, tax filing
time depends on the fiscal year of your club or organization. Although
I expect most KYSA affiliates are tax-exempt, there may be a few who are
not. Tax-exempt status means your organization is exempt from federal,
state, and local income taxes. If your organization is not tax-exempt
the federal rate of tax applied to your taxable income can range from 15% to
34% and possibly higher. The Kentucky income tax rate ranges from 4%
to 8.25%. For example, if your organization were to have taxable
income of $100,000 your federal and state taxes would be $22,250 and $5,250
respectively. This amounts to 27.5% of your income being paid to
federal and state government, not to mention local governments also desiring
their fair share. Try explaining that to your parents when raising
funds!
Remember, tax-exempt
is not the same as non-profit. In fact, in the current business
climate there are numerous organizations that, to the disappointment of
their owners, are non-profit but are not tax exempt. Tax-exempt is
designation granted by the IRS.
If your
organization is not tax-exempt and tax-exempt status is desired, the process
starts with the filing of an “Application for Recognition of Exemption” and
payment of a fee. Yes, the IRS charges a fee of either $150 or $500,
depending on your estimated gross receipts, to apply for tax-exempt status.
When the exemption is received from the IRS, the organization will be
designated as a 501(c)(3) exempt organization. Kentucky and its local
governments recognize the federal exemption from income taxes.
Another plus for
an organization obtaining the exemption from federal income taxes is the
exemption from Kentucky sales/use tax. This means an item of tangible
personal property, i.e., a soccer goal, purchased by the organization and
used by the organization in its exempt purpose, can be purchased free of
Kentucky sales/use tax. Kentucky will not grant this exemption unless
the organization has been granted 501(c)(3) exempt status by the IRS.
If your
organization desires to obtain tax-exempt status contact either your
organization’s accountant or contact our
State Office for more
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For more information, please contact us at:
StateOffice@kysoccer.net
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  This website is the official website of the
Kentucky Youth Soccer Association, Inc., 443 South Ashland
Avenue, Suite 201, Lexington,
Kentucky 40502 - Phone 859-268-1254 -
Facsimile 859-269-0545 © Kentucky Youth Soccer Association 2008. All rights
reserved. No commercial reproduction, adaptation, distribution or transmission
of any part or parts of this website or any information contained, herein
by any means whatsoever is permitted without the prior written permission
of Kentucky Youth Soccer.
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