TRENTON – Legislation sponsored by Senators Barbara Buono and Joseph Vitale that would create several new exemptions in the sales tax, including dues and fees collected by nonprofit organizations such as the YMCA and parking charges collected by municipal and county controlled garages and lots, was approved by the Senate today.
“At the end of the day, it’s up to the Legislature to ensure that sales tax is being applied in a fair and sensible manner,” said Senator Buono, D-Middlesex. “It was never our intent for non-profit groups like the YMCA to be subject to a sales tax and it is proving to be a huge burden on these groups.”
Senator Buono noted that the Department of the Treasury originally announced in August that organizations such at the YMCA would be exempt from the sales tax because of their non-profit status, but subsequently reversed that decision in September.
“It surprised many of us in Trenton when Treasury decided that non-profits would be required to collect sales tax on membership dues,” said Senator Buono. “It was clear that we needed to act quickly to reverse such an illogical decision and relieve local non-profits of this unnecessary burden.”
The bill, S-2269/2289, would exempt the fees and dues that are charged for access to health and fitness, athletic, sporting, and shopping clubs and facilities of nonprofit organizations and local governments, which were made taxable under the provisions of the sales tax extensions enacted in July.
In addition, the bill would exempt initiation fees that are imposed on all health and fitness, athletic, sporting or shopping clubs or organizations in New Jersey, as well as parking fees if the services are provided by a county or local government.
“The parking tax was acting as a disincentive for people to use mass transit,” added Senator Buono. “It’s important that we keep Park and Rides affordable so that we encourage commuters to get off of our highways and onto trains and buses.”
The Treasury Department ruling came just days before the sales tax changes went into effect and many groups affected by the ruling are finding it difficult to collect the sales tax retroactively on yearly dues paid before October 1. Groups such as the YMCA have reported that they will have to reduce program offerings in order to make up the difference.
The bill now goes to the full Assembly for final passage.