Local organization questioning tax notice
Some non-profits hit with bill
The Boys and Girls Clubs of the Sequoias is questioning a notice sent to them from the state Franchise Tax Board.
The non-profit is just one of many that has received notifications from the Franchise Tax Board regarding a dusty tax law on the books. It requires anyone who brings in an out-of-state performer to pay 7 percent of the gross amount of the performance.
“It is a bill that has no substantiation,” said Joe Engelbrecht, the executive director of the Boys and Girls Clubs of the Sequoias. “We want to comply with the law, but we just think the facts are wrong in this case.” They have already responded to the notice through a fax and phone calls.
According to Mitch Brown, chairman of the Porterville fair, he has not been notified or given a tax bill.
Bills have been sent to a number of non-profit organizations that have used out-of-state entertainers. Engelbrecht said his organization received a tax ‘bill’ for $7,000 for a previous Vince Gill concert.
The Board has sent out notices, from as far back as 2008, to organizations that it believes owes the state money.
“These aren’t bills yet. They are just notices saying we have a reason to believe you owe us and to give us a call if that’s not the case,” said Dan Tahara, a spokesman for the Franchise Tax Board. He said that the 7 percent is just an estimate.
“It’s the highest someone would pay,” said Tahara.
The bills began going out in November and the bills go back four years. According to some media reports, the law requires non-profits to with hold a 7 percent tax on the gross amount paid to an out-of-state entertainer brought to California to perform.
Engelbrecht contends that the amounts they are required to pay is wrong and asks if the organization is even liable for the money since they hired a promoter, a third party, to book the act. According to Tahara, the notices and bills go to those who pay the performer.
Englebrecht said the effect to the organization will change the way it raises funds.
“If that’s a cost we have to endure we won’t bring people from out of state,” said Engelbrecht.