OT: Tax bill eliminates tax deduction for JPC ticket related gifts

[lbodel]

Apologies if this has been posted other places - and do not intend for this thread to debate whether the tax bill is good or bad for these people or those people....so please do not veer off course.

But it does directly impact Purdue fans. The bill eliminates the 80% tax-deductibility of gifts made in order to receive tickets from universities.

This obviously will result in a loss of some sort to the JPC, likely a significant amount. Has the JPC communicated at all about this? I do not have season tickets living on the East Coast, but have not received anything. This would immediately take place - i.e. if you are on a pledge/payment plan, any gifts after Dec. 31 would not be tax-deductible. So if you are, I'd make them by the end of this year if possible if the tax-deduction is important to you.

Another impact will be a 20% excise tax on salaries paid by universities over $1 million - which obviously covers football and men's basketball coaches. For example, Purdue will face a tax of about $675,000 for Jeff Brohm's salary.

 

[bonefish1]

MAGA!
Thank you President Trump!

 

[Fansince72]

Thank you President Trump!

We'll see

 

[TC4THREE]

Both changes seem reasonable to me.

 

[BoilerBiker]

will be interesting to see what booster clubs like osu will do (who even added another $3-5k donation requirement just for preferred parking).

 

[BoilerJS]

The Domers will take a hit. Well maybe not but the tax revenue will increase.

 

[BoilerBulldog]

Thanks for highlighting this. It’s been on my list to resign up for the JPC and this means I’ll do it by next week.

 

[Gerard_Francisco]

VA Tech sent out tax guidance today to their boosters. JPC has not provided any proactive update yet.

 

[Gerard_Francisco]

From VA Tech...

Dear Valued Hokie Club Member,
Thank you for your support of Hokie student-athletes through your giving to the Hokie Scholarship Fund. Your generosity and loyalty to Virginia Tech Athletics provides our student-athletes with the opportunities to succeed in the classroom, excel in competition, and serve the community in the spirit of Ut Prosim!
As you are likely aware, the current IRS code allows for gifts to be 80 percent deductible if giving such a donation provides the right to purchase tickets for seating at athletic events. Under tax legislation passed by Congress this week, the ability to deduct charitable contributions associated with the purchase of tickets would no longer be available, effective January 1, 2018. We are continuing to work with University constituents and development colleagues around the country on analyzing the full implications of this bill.
While the Hokie Scholarship Fund giving deadline for 2018-19 benefits is March 31, 2018, it may be to your advantage to consider making your Hokie Scholarship Fund gift for 2018-19 benefits, and/or pre-paying for future years, prior to the end of this 2017 tax year to guarantee tax-deductibility under current tax law. If you are choosing to pre-pay for future years, please note this in the comments section when making your gift online or in the memo line if you are paying by check. Below is a detailed listing of the end-of-year giving deadlines and office hours for the Hokie Club.
We advise you to consult with your personal tax advisor to determine whether giving by the 2017 tax deadline is of value to you.
Thank you for your continued support of Hokie student-athletes!

 

[Purdue4Life]

Not shocked at all JPC has sent out nothing in regards to this to all JPC members. I'm sure the high rollers have heard from them.

One day the JPC will care about all JPC members(who are also the future high rollers) instead of just the top.

 

[lbodel]

The Domers will take a hit. Well maybe not but the tax revenue will increase.

At the end of the day, it's going to hit the Purdue's of the world a lot more than ND, Ohio State, etc. Between Painter and Brohm, that's another $1 million in "tax" they will have to pay on salaries. I'd guess 75% of JPC's revenue is ticket related - that will come crumbling down.

 

[Wolegib]

a potential loophole question. Does the university pay Painter and Brohm's salaries? or Does the John Purdue Club pay their salaries?

I ask because you say above that Universities would have to pay an excise tax on university employees salaries. Are Brohm and Painter university employees? or do they work for the JPC ? and if the excise tax only applies to university employees, then we might not have to pay that excise tax, if their salary is paid by boosters. I know Alabama has it set up very mystically, so that nobody really knows where the money comes from. IS the JPC a part of the university? or a separate organization?

 

[TopSecretBoiler]

At the end of the day, it's going to hit the Purdue's of the world a lot more than ND, Ohio State, etc. Between Painter and Brohm, that's another $1 million in "tax" they will have to pay on salaries. I'd guess 75% of JPC's revenue is ticket related - that will come crumbling down.

I doubt it. I rarely get tickets because I don't live near the school. However, I still give even though I can never really use half the benefits I'm entitled to get. They might have to create a separate line item for those who are getting tickets so it's easier to tell what amount they can and can't deduct. The high level donors are giving WAY more than the tickets are worth, even the mid level donors are too. I think a line item determining what portion of the donation is attributable to tickets will fix it and not be too big of a deal.

 

[TopSecretBoiler]

a potential loophole question. Does the university pay Painter and Brohm's salaries? or Does the John Purdue Club pay their salaries?

I ask because you say above that Universities would have to pay an excise tax on university employees salaries. Are Brohm and Painter university employees? or do they work for the JPC ? and if the excise tax only applies to university employees, then we might not have to pay that excise tax, if their salary is paid by boosters. I know Alabama has it set up very mystically, so that nobody really knows where the money comes from. IS the JPC a part of the university? or a separate organization?

The state pays somewhere around 250k for both men's and women's basketball coaches. The rest comes from the athletic dept. Same with Brohm.

 

[lbodel]

I doubt it. I rarely get tickets because I don't live near the school. However, I still give even though I can never really use half the benefits I'm entitled to get. They might have to create a separate line item for those who are getting tickets so it's easier to tell what amount they can and can't deduct. The high level donors are giving WAY more than the tickets are worth, even the mid level donors are too. I think a line item determining what portion of the donation is attributable to tickets will fix it and not be too big of a deal.

It applies to the gifts made in order to secure the seats. I.e. if you're giving the JPC $20,000 to sit in the lower level at midcourt, that $20k gift is not tax deductible any longer if you want your seats to be reflective of making that gift.

Also, it's unclear how Purdue will move forward now. Most schools (and Purdue is way behind the times) outline a per seat donation requirement depending on the location of their seats (i.e. row 5 in this section it is a $500 per seat gift minimum). Purdue seats Mackey by priority point - so in theory every dollar you are giving to the JPC is for seats as you get priority points for them. You'd have to set a threshold for what you want applied for seat donations (i.e. of my $10,000 gift, I only want priority points for $5k of it) if you want a tax deduction.

If you don't think this will impact giving, you're nuts.

 

[Wolegib]

The state pays somewhere around 250k for both men's and women's basketball coaches. The rest comes from the athletic dept. Same with Brohm.

So Purdue - the University - would not have to worry about going over the $750,000 threshold for employee salary, and having to pay that excise tax fee. but most people would think their entire salary comes from Purdue.

 

[TopSecretBoiler]

So Purdue - the University - would not have to worry about going over the $750,000 threshold for employee salary, and having to pay that excise tax fee. but most people would think their entire salary comes from Purdue.

most would think that because that is how most operate. Purdue is one of the rare universities who has a self sustaining athletic department and does not take from the university.

 

[TopSecretBoiler]

It applies to the gifts made in order to secure the seats. I.e. if you're giving the JPC $20,000 to sit in the lower level at midcourt, that $20k gift is not tax deductible any longer if you want your seats to be reflective of making that gift.

Also, it's unclear how Purdue will move forward now. Most schools (and Purdue is way behind the times) outline a per seat donation requirement depending on the location of their seats (i.e. row 5 in this section it is a $500 per seat gift minimum). Purdue seats Mackey by priority point - so in theory every dollar you are giving to the JPC is for seats as you get priority points for them. You'd have to set a threshold for what you want applied for seat donations (i.e. of my $10,000 gift, I only want priority points for $5k of it) if you want a tax deduction.

If you don't think this will impact giving, you're nuts.

No you misunderstood. I'm saying they could make the seats a separate line item. Currently, I give to both JPC and the alumni association separately. I buy no athletic event seats because I live on the east coast. So regardless that I *could* buy nice seats, I'm not currently getting that benefit. There are a lot of people like me. I think G&B prints the donor list every year. Not all those people buy tickets. Now if I move back to IN and decide to buy tickets, I still have to buy those tickets on top of my gift. They aren't rolled into my gift. My donation only gets me priority, not a guarantee of the actual seats. So I don't see how you're getting that 75% of JPC donation is ticket related.

 

[Wolegib]

a related matter. I'm part of the Purdue Musical Organizations PMO. I used to be a member of the season concert series. and I donate money to Purdue on behalf of PMO. by doing so I get my choice for some very good seats at the PMO Christmas show. isn't this basically the same thing? I'm donating money to Purdue. In return, I'm buying tickets for seats in premium rows for musical concerts. I do the same for our local college and receive preferred tickets for theater and concert tickets.

 

[lbodel]

No you misunderstood. I'm saying they could make the seats a separate line item. Currently, I give to both JPC and the alumni association separately. I buy no athletic event seats because I live on the east coast. So regardless that I *could* buy nice seats, I'm not currently getting that benefit. There are a lot of people like me. I think G&B prints the donor list every year. Not all those people buy tickets. Now if I move back to IN and decide to buy tickets, I still have to buy those tickets on top of my gift. They aren't rolled into my gift. My donation only gets me priority, not a guarantee of the actual seats. So I don't see how you're getting that 75% of JPC donation is ticket related.

I was simply estimating that's the percentage of donors who give for season ticket purposes. I think the JPC says it has around 7,000 donors. If 5,000 had season tickets - and average 4 season tickets - that's 20k season tickets at football, which is under what we have at football (but obviously not everyone is a JPC donor - although you also have more people who are basketball season ticket holders). Yes, there are people who give to JPC out of the goodness of their own heart, you and I both. But I don't think it's several thousand/more than half of donors.

I'd also add - this is unclear to me - shouldn't you have to decline ALL benefits in order to then use it as a tax deduction? For example, you have to be a JPC member to buy NCAA Tournament, Big Ten Tournament, select home games, etc. - so in our cases, are we still able to deduct that gift?

 

[lbodel]

a related matter. I'm part of the Purdue Musical Organizations PMO. I used to be a member of the season concert series. and I donate money to Purdue on behalf of PMO. by doing so I get my choice for some very good seats at the PMO Christmas show. isn't this basically the same thing? I'm donating money to Purdue. In return, I'm buying tickets for seats in premium rows for musical concerts. I do the same for our local college and receive preferred tickets for theater and concert tickets.

Well, without veering off topic - there's a lot of random things "targeted" in higher education in this bill. Also, not sure why a tax-exempt church can pay pastors over $1 million, but universities can't pay university presidents, etc. $1 million without an excise tax. I'd probably keep it on the down-low about your benefits though! ha

Also, has the JPC still not sent anything? Saw this in another article...

SMU, Florida State and Oklahoma have offered boosters the ability to pay for multiple years of season-ticket donations up front to be able to take advantage of the current deduction.

 

[stout1]

Also, not sure why a tax-exempt church can pay pastors over $1 million, but universities can't pay university presidents, etc. $1 million without an excise tax.

That’s pretty easy to figure out once you think about who is in the majority in Congress and the rhetoric they use to inflame their base.

 

[BoilerAndy]

That’s pretty easy to figure out once you think about who is in the majority in Congress and the rhetoric they use to inflame their base.

Well, do you suppose it might have something to do with the Constitution? But if the minority and their base are inflamed by it, they can go out and scream at the sky. That seems to work for them.

 

[stout1]

Well, do you suppose it might have something to do with the Constitution? But if the minority and their base are inflamed by it, they can go out and scream at the sky. That seems to work for them.

The tax exempt status of churches is enshrined in the constitution?

 

[BoilerAndy]

The tax exempt status of churches is enshrined in the constitution?

Whether you like it or not, the Supreme Court thinks so. Since the founding of our nation, churches have been exempt. Churches aren't even required to request exemption from the IRS.

 

[70boiler]

Whether you like it or not, the Supreme Court thinks so. Since the founding of our nation, churches have been exempt. Churches aren't even required to request exemption from the IRS.

Are you referring to Walz v. Tax Commission or do you have some other case in mind?

 

[BoilerAndy]

Are you referring to Walz v. Tax Commission or do you have some other case in mind?

Regarding the Supreme Court? Yes. The other statements are true, as well.

 

[stout1]

Whether you like it or not, the Supreme Court thinks so. Since the founding of our nation, churches have been exempt. Churches aren't even required to request exemption from the IRS.

1. I really have no opinion on it. As someone who supports a church with my time, talents and tithe I appreciate my charitable deduction. However, I can understand the issues people have with televangelists and megachurch pastors who seem to be taking advantage of the tax exempt status.

2. Yes the Supreme Court has said that the tax exempt status of churches doesn’t violate the establishment clause but that doesn’t mean that it is enshrined in the Constitution. The decision is partially based upon the idea that churches are a source societal benefit to the place they are located. Again, I see many examples of churches fall down in that mission. A local to me church over the last 5-7 years has spent most of their money supporting their pastor who is at the forefront of the movement to break up the ELCA over gay clergy. I’m not sure what value that brings to my locality.

3. Churches are lumped in with schools, hospitals and other institutions who don’t have to apply for tax exempt status. The other groups are also heavily regulated and audited to insure that they are accomplishing their mission of societal benefit. In Indiana the state put in place strict rules on superintendent compensation. I’m not sure an excise tax on exorbitant pastor salaries is terribly onerous. I’m fact in light of the recent ruling concerning the tax exempt status of clergy housing allowances it might not violate the law.

With all of that said, I stand by my statement. Taxing universities that pay high salaries plays well to the base.

 

[70boiler]

Regarding the Supreme Court? Yes. The other statements are true, as well.

Walz doesn't actually say that any tax exemption for churches is a right. Walz dealt with the inverse issue. The case was about whether a State was constitutionally prohibited from granting a tax exemption to churches. The Court decided that the Establishment Clause did not prohibit it.
I don't believe that the Supreme Court has ever ruled on the issue wherein it stated the the Federal Constitution requires exempt status. It has certainly upheld the right of Congress to grant such a tax exemption which Congress has done. Most, if not all, states do have such provisions specifically in their constitutions requiring church property exemptions.

 

[Mandeville LA]

Here is the way around the new tax law and I am sure every university will figure it out. Here is the example. I am sure you will follow.

Booster gives the university $20,000 a year. Tickets to sporting events are covered by this donation. So now the university has to figure out a system that does both. $20,000 donation but the university states the value of the tickets they receive is $1,000 or $500 whatever they want. The tickets are discounted to boosters due to years of being a club member of what ever they want. it will happen. So a guy that has given for 5 plus years receives a 70% discount on tickets. problem solved.

 

[lbodel]

Here is the way around the new tax law and I am sure every university will figure it out. Here is the example. I am sure you will follow.

Booster gives the university $20,000 a year. Tickets to sporting events are covered by this donation. So now the university has to figure out a system that does both. $20,000 donation but the university states the value of the tickets they receive is $1,000 or $500 whatever they want. The tickets are discounted to boosters due to years of being a club member of what ever they want. it will happen. So a guy that has given for 5 plus years receives a 70% discount on tickets. problem solved.

The problem there is supply/demand. Right now, having a $1,000 per seat donation for good seats eliminates demand. If you make that same seat value $100, you have tons more people trying to get those. And if you try to differentiate those people based on giving, then aren't you back where you started?

The whole rule seems very obtuse. As I mentioned in another post, you have to be a JPC member to buy Big Ten Tournament, NCAA Tournament and select home/away events - but that's not covered by this rule on giving to get? And as others mentioned, there's a lot more areas out there that require a gift in order to get something, like tickets. Why is the focus on athletics? The JPC, as we know, is a scholarship fund for all student-athletes. So most schools now are just going to take a hit on scholarship dollars offered to primarily non-revenue athletes.

 

[BoilerMaker P]

That’s pretty easy to figure out once you think about who is in the majority in Congress and the rhetoric they use to inflame their base.

LOL. Any church that's paying their pastor a million dollar salary may want to go back and reconsider their mission.

 

[stout1]

LOL. Any church that's paying their pastor a million dollar salary may want to go back and reconsider their mission.

Not sure why you quoted me, but I agree.

 

[BoilerMaker P]

Not sure why you quoted me, but I agree.

Sorry, I meant to reply to the post that you were replying to there.

 

[TopSecretBoiler]

The problem there is supply/demand. Right now, having a $1,000 per seat donation for good seats eliminates demand. If you make that same seat value $100, you have tons more people trying to get those. And if you try to differentiate those people based on giving, then aren't you back where you started?

The whole rule seems very obtuse. As I mentioned in another post, you have to be a JPC member to buy Big Ten Tournament, NCAA Tournament and select home/away events - but that's not covered by this rule on giving to get? And as others mentioned, there's a lot more areas out there that require a gift in order to get something, like tickets. Why is the focus on athletics? The JPC, as we know, is a scholarship fund for all student-athletes. So most schools now are just going to take a hit on scholarship dollars offered to primarily non-revenue athletes.

It's just gonna have to be 2 buckets. One normal tax deductible JPC without ticket rights, and a second ticket bucket. It will absolutely drive the price of tickets up. I would look at doing the tickets as a charity auction. You can still deduct a lot that way.

 

[BoilerAndy]

Walz doesn't actually say that any tax exemption for churches is a right. Walz dealt with the inverse issue. The case was about whether a State was constitutionally prohibited from granting a tax exemption to churches. The Court decided that the Establishment Clause did not prohibit it.
I don't believe that the Supreme Court has ever ruled on the issue wherein it stated the the Federal Constitution requires exempt status. It has certainly upheld the right of Congress to grant such a tax exemption which Congress has done. Most, if not all, states do have such provisions specifically in their constitutions requiring church property exemptions.

But US Supreme Court went much further than that, using clear, broad language:

"The exemption created a more minimal and remote involvement between church and state than did taxation because it restricted the fiscal relationship between church and state and reinforced the desired separation insulating one from the other."

This is all consistent with Chief Justice John Marshall's view that "the power to tax involves the power to destroy", which is always cited in these discussions and tied to the establishment clause.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.

 

[BoilerAndy]

1. I really have no opinion on it. As someone who supports a church with my time, talents and tithe I appreciate my charitable deduction. However, I can understand the issues people have with televangelists and megachurch pastors who seem to be taking advantage of the tax exempt status.

2. Yes the Supreme Court has said that the tax exempt status of churches doesn’t violate the establishment clause but that doesn’t mean that it is enshrined in the Constitution. The decision is partially based upon the idea that churches are a source societal benefit to the place they are located. Again, I see many examples of churches fall down in that mission. A local to me church over the last 5-7 years has spent most of their money supporting their pastor who is at the forefront of the movement to break up the ELCA over gay clergy. I’m not sure what value that brings to my locality.

3. Churches are lumped in with schools, hospitals and other institutions who don’t have to apply for tax exempt status. The other groups are also heavily regulated and audited to insure that they are accomplishing their mission of societal benefit. In Indiana the state put in place strict rules on superintendent compensation. I’m not sure an excise tax on exorbitant pastor salaries is terribly onerous. I’m fact in light of the recent ruling concerning the tax exempt status of clergy housing allowances it might not violate the law.

With all of that said, I stand by my statement. Taxing universities that pay high salaries plays well to the base.

1. If you are referring to fraud, embezzling, etc., then there are already laws against those things, and they have been used against church leaders. You don't punish all churches because you don't like the way some people worship.

2. Again, the Supreme Court has been clear that it supports separation, which is enshrined in the Constitution. The decision was based largely on that principle -- not because churches "do good stuff". And again, you giving examples of wrongdoing does not negate the rights of others. I know people who drive like a$$holes and should have their licenses suspended. I would never argue that no one should have the right to drive because of these people.

3. No. The Constitution and the courts do not lump churches in with "schools, hospitals and other institutions". And you trying to make some silly political points about this(!) only exposes your lack of basic education.

 

[70boiler]

But US Supreme Court went much further than that, using clear, broad language:

"The exemption created a more minimal and remote involvement between church and state than did taxation because it restricted the fiscal relationship between church and state and reinforced the desired separation insulating one from the other."

This is all consistent with Chief Justice John Marshall's view that "the power to tax involves the power to destroy", which is always cited in these discussions and tied to the establishment clause.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.

So should I take that you are a lawyer and such is the basis for your implied assertion that my following comment is wrong

Walz doesn't actually say that any tax exemption for churches is a right. Walz dealt with the inverse issue. The case was about whether a State was constitutionally prohibited from granting a tax exemption to churches. The Court decided that the Establishment Clause did not prohibit it...

?

 

[BoilerAndy]

So should I take that you are a lawyer and such is the basis for your implied assertion that my following comment is wrong
?

I notice that you keep trying, but you are not very good at this straw man thing.

Show me where I made an "assertion" that your "comment was wrong."

 

[70boiler]

That's not a straw man.
How about answering whether you are a lawyer...