New Kentucky sales tax to hit summer camps, other services

LOUISVILLE, Ky. (WDRB) – Kentucky’s sales tax changes that go into effect July 1 will hit a lot more services than veterinary care and auto repairs, including many provided by nonprofits.

The state recently decided that even nonprofit fitness centers like the YMCA will have to charge the 6 percent sales tax on their memberships.

In an interview, YMCA of Greater Louisville CEO Steve Tarver said organizations like his might be an “unintended consequence” of the tax reform enacted by the Republican-controlled state legislature.

Tarver said the Y will have to charge the 6 percent not only on its monthly membership fees, but also on fees for services like swim lessons, chronic disease management programs targeting diseases like diabetes and personal training sessions.

Greg Nielsen, director of the Center for Nonprofit Excellence in Louisville, said nonprofit organizations that provide summer camps and other services still have a lot of questions about how to implement the tax and exactly what it applies to.

"The Department of Revenue is trying to figure this out as we go," Nielsen said. "Typical nonprofit organizations are sales tax exempt, so this is a whirlwind that we're not familiar with, and so everything from how do we collect and value the sales tax to whom do we remit it and how often do we remit it, all of those really fundamental basic questions are things that our nonprofit members are asking us about."

The tax applies to all summer camps in Kentucky, not just camps at nonprofits. 

"It's important for me that I keep my program affordable because gymnastics is so good for kids," Kentucky Gymnastics Academy owner, Shannon Wickel said. "That's a lot of money for many, many families."

The sales tax is a "bookkeeping nightmare," according to Wickel. 

"I have a competitive team and they charge fees, but some of our meets are out of state, so do I not charge sales tax on those fees?" Wickel said. "And do I just charge sales tax to the parents on the meets we go to that are in state?"

Wickel this the new tax will keep some families from participating in camps and competitive teams. 

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