Possible gross receipts tax looms for charities

Eric Butler

New Mexico’s non-profit groups do not pay gross receipts taxes for commercial services or for goods sold.
They’d like to keep it that way.
The state’s Blue Ribbon Tax Committee meets this week to consider a series of tax proposals it will recommend to Gov. Bill Richardson. One proposal would require non-profit agencies collect gross receipts taxes on items such as Girl Scout cookies or clothing from the Salvation Army’s thrift store.
Officials with several non-profit groups gathered at Clovis-Carver Public Library on Tuesday to voice concerns against the possibility.
“I want to clarify that donations would not be taxed — and thank goodness for that,” said Nancy Taylor of Clovis’ Food Bank, which supplies the needy over a nine-county area of the state.
But Taylor said her group and others like it would suffer if it were required to pay a gross receipts tax — more than 6 percent in Curry County — on goods sold.
“Two of our trucks are basically going to be totally wiped out,” Taylor said. “Folks, we can’t afford that and there’s a lot of New Mexico product that’s going to go to waste.”
Erinn Burch, executive director of the Curry County United Way, said she doesn’t believe a 6-percent tax would keep people from purchasing candy from youth groups or keep them away from the thrift store. “They’re never going to be able to purchase jeans for 50 cents anywhere else in town,” she said. But she urged her fellow non-profit directors at the press conference to send input to legislators opposing a gross receipts tax.
Leaders of some groups, whose existence is derived through grant money, also expressed worry over their situations.
Dawn Pivonka, director of Youth Opportunities Unlimited, said she understood that the grants themselves — which mostly come from the state — would be taxed under one proposal.
That, according to Pivonka, would reduce the amount of the grants that her group relies upon.
“It basically means one less counselor for us, and we only have two,” Pivonka said. “All of the Children, Youth and Families (department) contractors have gotten together and discussed exactly what this would mean. It’s going to seriously hurt us.”