Author Topic: Tax bill effect on Ahearn Fund  (Read 2076 times)

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Offline Kat Kid

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Tax bill effect on Ahearn Fund
« on: November 17, 2017, 11:57:32 AM »
Both the House and Senate Tax bills eliminate the deduction for seat donations. Not sure if there would be an obvious work around simply using the current or a modified Ahean points system.

If this is eliminated for every school, seems like it would hurt us quite a bit more than others as we don't have a large t-shirt fan base and our stadium relies on suite revenue as a large percentage because our capacity is so low. No clue how worried we should be, but this seems pretty bad.

All that said it could be worse. We just completed an absurd amount of infrastructure and most of it was paid for. For comparison sake, this could absolutely crater KU's efforts to raise funds for stadium renovations as a big chunk of the way schools pay for these is securing donations tied to the new seats/suites.

Thoughts?


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Offline BushBlister

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Re: Tax bill effect on Ahearn Fund
« Reply #1 on: November 17, 2017, 01:02:15 PM »
I THINK ITS A SLAM DUNK!!!!!!!!!!!!!!!!!!
i got a laptop now

Offline sonofdaxjones

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Re: Tax bill effect on Ahearn Fund
« Reply #2 on: November 17, 2017, 01:04:57 PM »
At K-State annual donations are tied to operational income.

Capital Contributions are a separate item.   The crux is capital donations tied to seating arrangements/access to suites/club.  Hmm


Offline MakeItRain

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Re: Tax bill effect on Ahearn Fund
« Reply #3 on: November 17, 2017, 01:14:21 PM »
I'm sure you know the house proposal is pretty much dead on arrival in the Senate anyway, they can only have one more defection. However, for the sake of conversation let's assume it's absolutely going to happen. I do agree with you that there will be some attempt at a work around for the universities, an attempt at finding a loophole, that's pretty much how accountants are doing these things anyway. I do think that the effect wouldn't be as bad as you may think. I'm going to assume that most of the seats that have a donation attached to them are going to people who still get the standard deduction, especially given the standard deduction is purported to be increasing. I know where I sit and what I pay for a donation per seat, my seats aren't the best but they're better than most. Despite paying a decent contribution for four seats I still hit the standard deduction, I figure most at my donor level and below are in the same boat.

Now this is a completely different story for sections 4-6 and premium seating. I do think that people in these sections love their school and college football enough where they can afford to keep the premium seats without the tax credit. I think the biggest effect will be on the brokers who purchase these season tickets to attempt to turn a profit, I can't see them ponying up for that without the credit. So in the end it may actually help the consumer.

Offline Kat Kid

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Re: Tax bill effect on Ahearn Fund
« Reply #4 on: November 17, 2017, 01:14:28 PM »
At K-State annual donations are tied to operational income.

Capital Contributions are a separate item.   The crux is capital donations tied to seating arrangements/access to suites/club.  Hmm

Aren't these types of internal accounting procedures pretty easily modified?  I honestly don't know how the bill is written to know if there is an easy work around or one that will quickly develop. But this seems like a big threat to schools that rely on "forced" ticket donations as a pretty big part of their revenue.

Offline XocolateThundarr

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Re: Tax bill effect on Ahearn Fund
« Reply #5 on: November 17, 2017, 01:19:18 PM »
I don't know how much it would affect suite revenue.  I think a lot of those are owned by businesses.  Depending on the accounting, I would think that all or at least 50% of the cost could be written off as long as "clients" are taken to games.  :dunno:
@mikec2w

Offline Kat Kid

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Re: Tax bill effect on Ahearn Fund
« Reply #6 on: November 17, 2017, 01:21:31 PM »
I'm sure you know the house proposal is pretty much dead on arrival in the Senate anyway, they can only have one more defection. However, for the sake of conversation let's assume it's absolutely going to happen. I do agree with you that there will be some attempt at a work around for the universities, an attempt at finding a loophole, that's pretty much how accountants are doing these things anyway. I do think that the effect wouldn't be as bad as you may think. I'm going to assume that most of the seats that have a donation attached to them are going to people who still get the standard deduction, especially given the standard deduction is purported to be increasing. I know where I sit and what I pay for a donation per seat, my seats aren't the best but they're better than most. Despite paying a decent contribution for four seats I still hit the standard deduction, I figure most at my donor level and below are in the same boat.

Now this is a completely different story for sections 4-6 and premium seating. I do think that people in these sections love their school and college football enough where they can afford to keep the premium seats without the tax credit. I think the biggest effect will be on the brokers who purchase these season tickets to attempt to turn a profit, I can't see them ponying up for that without the credit. So in the end it may actually help the consumer.

1) right, but this clause is in both bills right now.

2) not sure how this would affect businesses who get suites as a business expense, would they be covered under this as well?

Offline sonofdaxjones

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Re: Tax bill effect on Ahearn Fund
« Reply #7 on: November 17, 2017, 01:27:55 PM »
At K-State annual donations are tied to operational income.

Capital Contributions are a separate item.   The crux is capital donations tied to seating arrangements/access to suites/club.  Hmm

Aren't these types of internal accounting procedures pretty easily modified?  I honestly don't know how the bill is written to know if there is an easy work around or one that will quickly develop. But this seems like a big threat to schools that rely on "forced" ticket donations as a pretty big part of their revenue.

First off, yeah, this has serious implications for K-State and lots of others, and yeah, they'll be lots of maneuvering to make this stuff tax deductible if this goes through.   Things are going to get shuffled, restructured, reworded, you name it.

Offline MakeItRain

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Re: Tax bill effect on Ahearn Fund
« Reply #8 on: November 17, 2017, 01:43:43 PM »
1) right, but this clause is in both bills right now.

Did you read the bills to find this or did you read it somewhere else? The reason I ask is that I am very surprised to see this, especially in the house bill. I say that because, a lot of where these Republicans come from, college football is king. This provision would/could effect constituents that I'd think, who would be very vocal. I know college football season ticket holders are a relatively small constituency, but a well connected one.

Offline Kat Kid

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Re: Tax bill effect on Ahearn Fund
« Reply #9 on: November 17, 2017, 01:45:52 PM »
1) right, but this clause is in both bills right now.

Did you read the bills to find this or did you read it somewhere else? The reason I ask is that I am very surprised to see this, especially in the house bill. I say that because, a lot of where these Republicans come from, college football is king. This provision would/could effect constituents that I'd think, who would be very vocal. I know college football season ticket holders are a relatively small constituency, but a well connected one.

Wall Street Journal reported this, saw it on twitter and read the WSJ link so seems pretty solid.

I was surprised as well, but the House bill already passed and this seems like an unlikely thing that would be taken out in Reconciliation.

Offline hjfklmor

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Re: Tax bill effect on Ahearn Fund
« Reply #10 on: November 17, 2017, 01:48:20 PM »
1) right, but this clause is in both bills right now.

Did you read the bills to find this or did you read it somewhere else? The reason I ask is that I am very surprised to see this, especially in the house bill. I say that because, a lot of where these Republicans come from, college football is king. This provision would/could effect constituents that I'd think, who would be very vocal. I know college football season ticket holders are a relatively small constituency, but a well connected one.

It's in both bills. I don't have the House bill in front of me but it is on page 175 of the Chairman's Mark of the Tax Cuts and Jobs Act.

Edit: here is the Senate version. They don't have statutory language yet. https://www.finance.senate.gov/imo/media/doc/JCX-51-17%20%20SFC%20Markup%2011-9.pdf

Offline ksuchris2000

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Re: Tax bill effect on Ahearn Fund
« Reply #11 on: November 17, 2017, 01:58:23 PM »
It's true. I've seen reference in multiple news outlets.

I'm not sure it will have a lot of impact other than make the tickets more expensive for donors.

IMO donors aren't giving because they get a tax break, they're giving because they love the school, the tradition, etc... The tax break is just a kicker. IT's also a big ego thing.

Offline MakeItRain

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Re: Tax bill effect on Ahearn Fund
« Reply #12 on: November 17, 2017, 02:02:35 PM »
It's not going to make the tickets more expensive, just potentially less deductible. It isn't like that deduction is dollar for dollar anyway.

Offline ksuchris2000

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Re: Tax bill effect on Ahearn Fund
« Reply #13 on: November 17, 2017, 02:13:24 PM »
It's not going to make the tickets more expensive, just potentially less deductible. It isn't like that deduction is dollar for dollar anyway.

The ticket price face value of course will not change.

For season ticket holders, No deduction has the same effect as raising the ticket price. Does K-State offer ANY season tickets without a donation of some kind?

2 - .4 = 1.6

2 - 0 = 2

Offline MakeItRain

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Re: Tax bill effect on Ahearn Fund
« Reply #14 on: November 17, 2017, 03:24:00 PM »
Yes, the end zones and the far north and south corners of the view level

Offline Kat Kid

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Re: Tax bill effect on Ahearn Fund
« Reply #15 on: November 21, 2017, 11:48:58 AM »
Holy crap!
(this actually won't hurt K-State nearly as much as other schools though)

http://www.newsobserver.com/sports/college/acc/unc/article185817328.html

Quote
WASHINGTON
The money generated by all your Tar Heel, Wolfpack and Blue Devil hats, shirts and coffee mugs funds scholarships for students at your favorite university.

Now Senate Republicans want some of that money to help pay for tax reform.

Ordinarily, nonprofits don’t pay federal taxes on their income – and that includes most colleges. But under the Senate’s tax bill, royalties generated by nonprofits based on their names and logos will be taxed. It could be a large hit to universities with popular athletic departments that generate lots of money through merchandise sales — like the Triangle’s ACC schools.

Offline catastrophe

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Re: Tax bill effect on Ahearn Fund
« Reply #16 on: November 21, 2017, 12:41:22 PM »
 If true, that is one of the few things this bill would actually get right.

Offline Pete

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Re: Tax bill effect on Ahearn Fund
« Reply #17 on: November 21, 2017, 03:31:56 PM »
Agreed