The 131st Ohio General Assembly is in full swing, spending most of its time on the state budget appropriation and related bills. However, a couple of bills have appeared that may be of specific interest to the not-for-profit community.
The first is Senate Bill 86, sponsored by Senator Randy Gardner, that would add “quarter auctions” to the types of gambling that charitable organizations may operate. “Quarter auction” means a form of bingo in which one or more prizes are won by one or more persons who have given valuable consideration for a chance to win a prize by purchasing one or more numbered bid paddles that correspond to the same numbered chip or token that is placed in a receptacle. The one or more winners of the quarter auction are determined by selecting a chip or token from the receptacle and matching the number of the selected chip or token to a numbered bid paddle held up by a person before the selection of the chip or token.
Quarter auctions would be treated under statute as a form of bingo, but would NOT require the operator to obtain a bingo or gaming license. A charitable organization is defined as an organization that is, and has received from the Internal Revenue Service a determination letter that currently is in effect stating that the organization is, exempt from federal income taxation under subsection 501(a) and described in subsection 501(c)(3) of the Internal Revenue Code; or a volunteer rescue service organization, volunteer firefighter’s organization, veteran’s organization, fraternal organization, or sporting organization that is exempt from federal income taxation under subsection 501(c)(4), (c)(7), (c)(8), (c)(10), or (c)(19) of the Internal Revenue Code. The organization shall have been in continuous existence as such in this state for a period of two years immediately preceding either the making of an application for a bingo license under section 2915.08 of the Revised Code or the conducting of any game of chance permitted under statute. The bill has been referred to the Senate Finance Committee.
House Bill 65, sponsored by Representative Denise Dreihaus, and including cosponsors of both parties, would create a “Tax Expenditure Review Committee” to periodically review and appraise the effectiveness of tax expenditures. Tax expenditures are items that exempt or except otherwise taxable property or transactions from being taxed by the state or local government. They generally include charitable or religious property tax and sales tax exemptions along with many other examples of tax credits or deferred taxation. Newly created tax expenditures would be scheduled for review as part of the legislation creating the expenditure and existing tax expenditures would be scheduled for review by the committee. For each tax expenditure reviewed, the committee would report on the following items:
- A statement of the purpose served by the tax expenditure.
- An appraisal of the tax expenditure’s effectiveness in serving its purpose.
- An evaluation of whether the tax expenditure’s purpose serves a public need.
- An evaluation of whether other statutes have enhanced or impeded the tax expenditure’s effectiveness in serving its purpose.
- An appraisal of whether the tax expenditure promotes economic growth and development.
- An estimate of the amount of revenue lost each fiscal year because of the tax expenditure.
- A recommendation as to whether the tax expenditure should be repealed.
- Any other information the committee considers relevant.
In an appendix to its report, the committee may include a draft of a bill that would improve the tax expenditure’s effectiveness in serving its purpose; redefine the tax expenditure’s purpose to serve or better serve a public need; retain or improve the statutes that enhance, or amend or repeal statutes that impede, the tax expenditure’s effectiveness in serving its purpose; improve the tax expenditure’s effectiveness in promoting economic growth and development; reduce the amount of revenue lost as a result of the tax expenditure; or repeal the tax expenditure. The bill has been referred to the House Ways and Means Committee.