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Colorado Charitable Bingo Association - represents various types of groups in the bingo industry
Corky Kyle, lobbyist for Colorado Charitable Bingo Association, which represents various types of groups in the bingo industry (e.g. owners, suppliers, manufacturers, non-profits), presented House Concurrent Resolution 03-1002 which was introduced by CCBA. This resolution would amend the part of the Colorado Constitution which does not allow for paid volunteers to work games of chance. The resolution would allow non-profits to pay their volunteers, but it would not be mandatory that they do so. This change would go on the ballot in 2004.
Ralph Feeback, of the Colorado Elks Association, said payment of volunteers would be a way of commercializing bingo for the hall owners and would profit the hall owners. If paid volunteers are allowed groups would have IRS taxes that would have to be paid, and the IRS may challenge a group's non-profit status. The Colorado Elks Association is, therefore, against the payment of volunteers. The money to pay these volunteers would have to come from the profits made by the charity. Mr. Feeback did feel that debit cards should be allowed to be used if a group wishes. He also stated that the minimum age for a games manager should be 21 years of age.
Nash Mines, of the Retired Enlisted Association, stated that when one induces a salary for workers, the group comes under State, Federal and Chapter government. Groups will lose volunteers because volunteers usually help at games to assist the organization and feel they are giving something to the organization by helping. If workers are paid, the volunteer loses their cause to assist the organization. Also, to pay workers would mean less profit for the charity. Mr. Mines felt debit cards should not be allowed to be used because it would induce people with limited funds to spend more than they would normally spend. He felt the minimum age for a games manager should be 21 years.
Ron Dahl, of the Retired Enlisted Association, pointed out that in previous meetings it had been decided that no legislation would go forward for a year. Delbert Lennie stated that Donivon Glassburn of CCBA had told him this was a last minute decision to do this resolution. Mr. Dahl was against the payment of volunteers as the primary purpose of the non-profit is to raise money for the community not to pay employees. He did not want debit cards to be used because they cannot be used to purchase lotto tickets, powerball tickets, etc. and should not be allowed for bingo games either. He also felt the minimum age for a games manager should be 21 years of age.
Jerry Gooding, of the Colorado JCI Senate, stated his group has been struggling to make money due to the casinos and big gaming. The advent of progressive games has helped his group to do more than break even in the past few months. He was concerned that if workers were paid it would bring a greater potential for abuse as well as pay differentials and tax concerns for the organization. As of now, he is against payment of volunteers. He is in favor of use of debit cards as he does not see the difference between this and writing checks. He felt a games manager should be at least 18 years of age.
Susan Allard, of the Colorado JC's, stated that as a young people's organization, it is harder to induce volunteers to help as there are many other things young people would rather be doing, and some incentive is needed to get them to assist the organization. She agrees with the use of debit cards and feels games managers should be 18 years or older.
Deano Gonzales, of the IRS, spoke on the tax related concerns with the payment of volunteers. He referred to the handout entitled "Gaming Publication for Tax-Exempt Organizations". Referring to page 17 of the booklet, he pointed out that there are employment taxes due for tax-exempt organizations if they use paid volunteers. On page 5 of the booklet, he spoke to Unrelated Business Income Tax. This is a tax imposed on any income not related to a group's exempt purposes. Gaming is never considered part of a group's exempt purposes except that bingo is an exclusion from this tax as long as this is not a violation of state or local law, and charitable games are exempt if volunteer labor is used. If paid volunteers are used, the group would no longer be exempt from the UBIT tax on charitable games because this violates the exemption of using strictly volunteers as workers. If the State allows workers to be paid, regular bingo would not fall under the UBIT (as it conforms to state law), but all other forms of charitable gaming (pull tabs, progressives and raffles) would not be excluded and would fall under the UBIT, which would amount to 50% of the net taken. Also, if the UBI tax becomes too high, a group may lose its public charity status and be classified as a private foundation which may have to close its gaming activities.
Source: BonusGambler.com Editors' Choice
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