The Sumner Downtown Association is on its way to becoming a charitable non-profit, opening up possibilities to tax breaks, which will free up more cash for the organization.
The downtown association applied for lodging tax funding in November, but did not receive any. Arla Holzschuh said the next step to alleviate budget crunches at the association is to qualify as a 501(c)(3). The Internal Revenue Service has a section called 501(c)(3) classification.
An organization in this category is eligible to receive tax-deductible contributions if it meets certain criteria. A charitable organization qualifies under several categories and purposes and the SDA may qualify for its maintaining public buildings and lessening the burden of government.
Because the SDA creates its own signs and parking regulations, it alleviates the burden on the city to do this, which may qualify it under the lessening the burden of government category.
The SDA may also qualify under historic preservation and community education for its work toward teaching about the area’s history.
“We have a small resource library in the office,” Holzschuh said.
The library includes archived newspapers and books on historic preservation.
“And of course there are articles and information, from everything from signage to how to run your business,” she said.
The SDA is planning historic walking tours so people can learn about the history of the buildings.
Holzschuh discussed the application process at the association’s regular meeting on Dec. 14, saying it’s a lengthy process and it may be months before the SDA receives word on eligibility.
If the SDA is accepted, it could bring good financial news not only to the association, but donors too.
Through the Main Street Tax Credit Incentive Program businesses are able to take a business and occupation tax credit or a public utility tax credit for donations to downtown revitalization organizations, including the SDA. Under the association’s current status, a portion of a business’ donation is tax-deductible, but upon receiving classification as a charitable organization, donors could deduct their entire donations, Holzschuh said.
