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Sales Tax Expansion to Impact Donations to Some Nonprofits

Thalian Hall Center for the Performing Arts
Thalian Hall's mainstage theater

Nonprofits around the region are grappling with the meaning of changes to state tax laws that go into effect January 1st. 

Passed by the General Assembly earlier this year, the expansion of the sales tax means that cultural events, sports games, even museum admissions and historic tours will cost ticket buyers more.  But nonprofit staffers say they’re concerned about some of the nuances in the law they’re just now uncovering.    

Nonprofits rely on donors, benefit events, and fundraising galas – often for a large part of their annual income. 

Thalian Hall Center for the Performing Arts is a Wilmington organization that hosts its own season of shows in addition to renting out its space to other nonprofit groups. 

Executive Director Tony Rivenbark says the impact of the sales tax expansion is going to be a game-changer for donors and nonprofits.  Here’s how it works for his organization: 

“If you were giving $100 worth of tickets for [a] $100 contribution, then you’ve got to pay the tax on that or whatever amount that may be.  You know, we have people that give a $5,000 gift or a $10,000 annual gift, then they may get several hundred dollars worth of tickets for that.  But we’re going to have to pay 7% on that several hundred dollars worth of tickets.”

And that means a reduction in the amount netted from the donor, which means a reduction in Thalian Hall’s bottom line, says Rivenbark.  He’s also concerned, he says, about the additional bookkeeping that will be required.  As the venue, THCPA is responsible for paying the tax for every event that goes through its box office.