It seems like everyone agrees that next time we should make sure our wording and documentation is proper so no one has to talk to the gov any more than necessary. 
Ive seen others mention before that we should have a clear write op of the rules on these things. More room specific fundraisers would be a great way to also show off the spaces capabilities.
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Professional advice is protection that is worth what we pay for it. Our opinions and recollections are interesting to discuss, but we need to know the applicable codes with certainty.
I get a little slower and my reading comprehension is not what I recall from my earlier days, so this may have been answered: Do we have a licensed attorney or certified public accountant (not just a person “with the government”), either of whom has special expertise in this area of the current tax code? If so, what did our legal/tax representative advise us?
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Cole, we do not have and presently cannot afford a tax attorney. Our CPA was busy preparing our income taxes and as far as I know was not consulted prior to the fundraiser. However, it’s also my experience that the final say always comes from the government agency enforcing the matter - in this case KDOR. You can get different answers from different private tax professionals, an issue I’ve been warned about by a CPA in the past when a business was involved.
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I have no opinion to offer in the forum on the topic of the use of taxes, nor of the principle of taxation. It’s a thing that exists and we must comply with it.
The offering of a receipt was a common business practice many years ago; in fact, one seldom would be offered it, and merchants would often post signs asking customers to notify the management if a receipt was not offered or provided. When I was in the Army many years ago, young soldiers were advised by their NCOs that they should ALWAYS get a copy of any form that they signed; it was like a receipt. We even had a form for any transfer of equipment custody: a “hand receipt”.
I recall from my ancient Business Law courses (in those wild and carefree days when I foolishly thought I wanted to become a serious and competent CPA) that the Uniform Commercial Code (to which Kansas subscribed at that time), a receipt was mandatory in any commercial transaction involving “consideration”.
The current common practice, at least locally, is to not even think of a receipt unless the customer (me, but I’m told I’m a curmudgeon) requests it.
The reason for the receipt, according to my ancient professor, is that a trade of any item or service for at least the nominal fee of one US dollar is a commercial or legal transaction and this “consideration” fee makes it enforceable in law. The receipt is therefore like a contract.
But this was before digital devices and records became common and buyers began to use digital money exchanges that include transaction histories. I’ve already recently tried to determine the current Kansas code concerning receipts, but I haven’t found any success. I believe it’s still a wise practice even if no longer required, but if we don’t have a professional legal opinion or a direction from the appropriate government entity, I think we should have one. And we should post that opinion or that government direction to all members who offer their Excellent Work to the public, whether for sale at a fixed price or for an unspecified “donation”.
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Carrie with KDOR is a really nice person and she already said she’d be happy to field additional questions. I’ll keep a running list of questions to ask her.
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They also have a list of best practices that we have to give to every vendor maybe this would be a great place to start?
Tax Tips for Event Vendors.pdf (251.9 KB)
While I’m sure we’re not the only nonprofit with these issues. It’s come up recently in 2 other nonprofits I work with. I’ve asked a nonprofit organization that educates other nonprofits to add a sales tax class for nonprofits.
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