Cumberland Times-News

December 12, 2013

Service club’s donations take tax hit, delegation asked to help

Matthew Bieniek
Cumberland Times-News

— CUMBERLAND — Money raised for charity by a student service club at Allegany College of Maryland is taxed by the state of Maryland, depriving worthy causes of hundreds of dollars each year raised by the membership’s hard work.

Club members are now asking the District 1 legislative delegation to help them with tax relief. The state requires payment of the 6 percent sales tax on items resold to raise money for charity.

 The Peace Studies Club has donated funds to the Union Rescue Mission, Toys for Happiness, organizations helping veterans returning from war, Doctors Without Borders, the Ark of Hope animal rescue and Haiti relief. Last year, though, those charities were deprived about $500, which went to pay Maryland taxes, students said.

“All the money we raise goes to charity,” said Ariana Stirrup, a member of the club. No funds raised are used for administration or to throw pizza parties and the like, Stirrup said. This semester, funds are being used to combat hunger.

The three students representing the organization were Stirrup, Fatu Siaka and Shinaya Prince. One example of the problem was outlined by students who, like many organizations, resell products to raise money. “The PSC buys coffee for a discounted price and we then sell the coffee at market value. ... All of the money ... made as profit is then redistributed” to charities, students said in a letter to the delegation.

Students said they hope a change in the tax rules would help all student service organizations raising money for charity.

Club members asked the delegation to intervene at the legislator’s pre-General Assembly session meeting Monday night at Allegany College of Maryland. The District 1 legislative delegation is made up of Sen. George Edwards and delegates Wendell Beitzel, Kevin Kelly and LeRoy Myers Jr.

Delegation members were supportive of the request and Kelly asked students to provide an updated list of the charities they have raised money for and prepare a letter to Maryland Comptroller Peter Franchot which the delegation could work from in developing an additional letter of support for the students’ request. The delegation will likely ask state tax officials if the matter can be resolved, possibly by an exception without legislation, or if fixing the problem would require changes in the current law.

Club members made a similar request last year, which the delegation forwarded to Franchot with a cover letter supporting the request. Club members said they’d heard nothing back from the comptroller’s office.

Matthew Bieniek can be contacted at mbieniek@times-news.com.