Allied Charities of Minnesota

News

  • 12 Jan 2018 13:08 | Allen Lund (Administrator)

    taxexemptorgIRS01122018.pdf

    You and your organization should read and be familiar with this publication.  ACM Attorney Mary Magnuson brought this to my attention.


  • 12 Jan 2018 08:20 | Allen Lund (Administrator)

    2018 Legislative Agenda:

    Donations exempt from gambling tax.  HF226/SF419 is in bill form and ready for the tax committees.  Rationale: We can find no entity that does not receive some tax benefit from making donations.

    Sales tax exemption.  No sales tax on paper games/electronic leases/electronic revenue share.  Rationale: Gambling tax is in lieu of all other taxes.

    External audit clarification.  External audits are currently required of non-profit organizations with more than $750,000 in gross receipts in a fiscal year, which for us means sales.  Our $750,000 would become sales minus prizes.  Those organizations that meet or exceed $750,000 of sales minus prizes in a fiscal year that use a Certified Public Accountant (CPA) to prepare all of their monthly gambling returns in a fiscal year would also be exempt.  Rationale: Prizes are not something that we can decide to pay or not pay.  To not pay even a two dollar playback will put you out of business.  Holding us responsible for 85% of what we take in that we then return to our patrons, which never hits our bank, is wrong.   We cannot use prizes to pay expenses, taxes/fees or donations.  Having a CPA review your business twelve times a year is better than once a year.

    Study/Commission of the state gambling tax.  To be comprised of two Representatives, two Senators, a Governor Appointee and 3 to 4 Charity Representatives.  Report would be due back to the legislature prior to the February 2019 forecast.  Rationale: There needs to be a complete review of how the current tax structure is impacting our ability to serve our communities and missions. 

    Approval of an electronic table for electronic tri-wheel.  Electronic tri-wheel was approved in the 2012 stadium legislation.  An electronic table is needed to complete the package.  To be taxed at the 8.5% rate.  Rationale:  An electronic tri-wheel and table would give us the ability to increase our mission dollars.   This is an evolution, not a revolution.  We need to use technology where it makes sense for us.

    Reduction in storage of paper games from 3 ½ years to 2 years.  Storage is an ever increasing burden on the organization.  Reducing the look back time will not compromise compliance reviews or revenue audits.  Rationale:  We are always being called on to reduce our expenses in lieu of tax relief.  Reducing this particular expense is a vehicle for getting more funds to our communities and missions.

    As it stands right now, all of these will be stand alone bills.  We are looking for authors/champions for the reduction in storage bill.  If you have a relationship with legislators and want this to pass please contact me for next steps.  As these bills get numbers we will be asking you to contact your legislators to ask them to sign onto and support these bills.  Every one of these bills will have opposition of some kind that prefers the status quo.  Without your and their support we will not get any of these bills passed. 

    Regards,


  • 21 Dec 2017 17:09 | Allen Lund (Administrator)

    A quick note to let you know that the 2017 edition of the Lawful Gambling Manual (also known as the Gambling Manager’s Handbook) is still available from Minnesota’s Bookstore.  Also available from Minnesota’s Bookstore are the 2016 editions of the Gambling Laws and Gambling Rules. 

     

    Here are links to all three books from our web site if you’d like to order them on line:  
    https://www.mnbookstore.com/other/miscellaneous-state-agency-products/charitable-gambling-products/gambling-laws-96.html   

    If you’d prefer to order over the phone with a credit card, feel free to give the bookstore a call at 651.297.3000 (metro) or 1.800.657.3757 (nationwide). Phone hours are 8 am – 4 pmMonday –Friday.


  • 19 Dec 2017 15:13 | Allen Lund (Administrator)

    2017 UBIT form changes

    We made changes to the 2017 Unrelated Business Income Tax return (Form M4NP). Some important changes include:

    • Line 1
      • Now states “Federal taxable income before Minnesota subtractions (from federal Form 990-T, line 34: 1120-C, line 27; 1120-H line 19; 1120-POL, line 19).”
      • Previously, line 1 stated “Federal taxable income before net operating loss and specific deduction (from federal forms 990-T, line 30; 1120-C, line 25a; 1120-H, line 17; 1120-POL, line 17c).”
    • Line 5
      • Now states “Total deductions from taxable net income (from M4NPI, line 2).” Before, this information was requested on line 7.
      • Previously, line 5 stated “Minnesota net operating loss deduction (from NOL).”

    What do these changes mean for me?

    • Depending on which federal form you file, the line from your federal form takes into account net operating loss, and special or specific deductions.
      • For example, if you file federal Form 990-T, report the amount from line 34 of Form 990-T on your Minnesota Form M4NP line 1 (instead of line 30). Line 34 from Federal Form 990-T is the total amount of unrelated business taxable income after any applicable net operating loss or specific deductions are applied.
    • Unrelated business income taxpayers are no longer required to maintain a separate net operating loss schedules for Minnesota purposes.
    • Minnesota allows net operating losses to be carried back two years and carried forward 20 years for UBIT.
    • Taxpayers may waive the carryback period by filing a separate statement with their federal tax return, declining to use the carryback. This election is permanent, and the taxpayer must file the statement by the due date of the return.

    Where can I get more information?

    For detailed information on other changes and instructions for completing Minnesota Form M4NPsee Minnesota Unrelated Business Income Tax Instructions.



  • 19 Dec 2017 15:08 | Allen Lund (Administrator)

    Minimum-wage rate adjusted for inflation as of Jan. 1, 2018. Minnesota's minimum-wage rates will be adjusted for inflation beginning Jan. 1, 2018, to $9.65 an hour for large employers and $7.87 an hour for other state minimum wages.

  • 11 Dec 2017 09:14 | Allen Lund (Administrator)

    We want to remind you that we have streamlined the annual certified inventory process to simplify reporting and reduce paperwork for you.

    The updated process was effective July 31, 2017.

    More time to conduct your annual inventory

    To provide more flexibility, you now have more time – up to 30 days after your fiscal year ends – to conduct and submit the annual certified inventory and cash count. You are no longer required to conduct the annual certified inventory and cash count at the close of business on the last day of the organization’s fiscal year or before the start of business on the first day of the new fiscal year.

    Fewer forms to fill out

    To reduce and simplify paperwork, we:

    • Eliminated the Annual Certified Cash Count by Site (Form CC).
      • You no longer need to audit games in play to reconcile start banks.
    • Condensed the Annual Certified Physical Inventory and Cash Count Summary (Form CI).
      • List the total cash count for each site. You no longer need to report the total dollar value of ending inventory.
    • Revised sections of the Annual Certified Physical Inventory and Cash Count Summary by Site (Form INV).
      • List the total cash count for all forms of gambling.
      • List all pull-tab, tipboard, raffle board, and paddlewheel games in your possession, including those in play. You no longer need to report the dollar value for each game (including paper bingo and raffles).
      • If your organization conducts paper bingo, you now submit the Physical Inventory/Bingo Paper Monthly Summary (Form LG903) for each site.

    New forms available on website

    You must use our updated forms (below) to report the annual inventory and cash count summary.


  • 05 Dec 2017 08:52 | Allen Lund (Administrator)

    Members,

    ACM has been asked repeatedly about organizing a work stoppage/boycott.

    We have been advised by counsel that even discussing such an idea can be viewed by authorities as a violation of the Sherman anti-trust act as a restriction of trade.

    If found guilty of violating the act penalties can be severe: Sherman Act Penalties

    ACM is NOT recommending a work stoppage/boycott.  ACM only wanted to know what all issues regarding a work stoppage/boycott would be for participating charities.  ACM wants no member organization or organization member to put themselves in jeopardy of fines or jail.

    We have contacted counsel that specializes in anti-trust law.  We will keep you informed of developments as they occur.

    It may be argued by the state that since we now pay more in taxes/fees than we have for communities/missions we are a de facto agent of government, critical to the operation of government and can no longer determine our own destiny.  

    An important question to answer will be: Can charities be forced by government to continue to operate (as in paying for a stadium), even though they may no longer be making what they consider reasonable for their communities/missions?   

    ACM is recommending that as of now you or your charity do not discuss or participate in a work stoppage/boycott.

    Regards,


  • 01 Dec 2017 06:17 | Allen Lund (Administrator)

    See the attached pdf for information on how to contact your legislators.

    contactinglegislators12012017.pdf

  • 24 Nov 2017 06:29 | Allen Lund (Administrator)

    Members and Associates,

    I have posted the FY2017 GCB Annual Report and a one page recap of that report on the ACM website www.alliedcharitiesmn.org

    There is only one message that I need you take away from the report and my recap:  When prizes+expenses+taxes+fees (cost of doing business) equal sales (income), charitable gaming will cease to exist. 

    There will be no lengthy internal debates or votes on whether or not to continue operating charitable gaming.  It will be over.  PERIOD.

    Our overall prize payout is now at 83.9% due to all forms combined, but paper tabs are now paying out at 84.6% and will most likely go over 85% in FY2018.  E-tabs are now paying out at 85.7% and will most likely go over 86% in FY2018.  These two forms account for over 93% of our total sales.  Where they go, we go. 

    Our average cost of doing business is now 96.16 cents on every dollar sold: $1.00-83.9 cents prize payout =16.1 cents - 8.06 cents expenses (50.07% of 16.1) = 8.04 cents - 4.2 cents taxes/fees (26% of 16.1) = 3.84 cents to missions.  If we cannot effect any reductions in payout/expenses/taxes/fees our overall cost of doing business will be over 97 cents by 2020, 98 cents by 2022.  Right now we are averaging 3.14 cents to missions on paper tabs and 2.4 cents on e-tabs. 

    By 2020 we will be netting less than 2 cents on both paper and e tabs, less than 1 cent by 2022 is not impossible.  Think about it, we are only 1.84 cents away from making less than two cents on every dollar that we touch.  Any combined increase of 1.85 cents in payout/expenses/taxes/fees will be our undoing.  Last fiscal year those four items combined for just shy of a half cent increase in our cost of doing business. 

    In FY2013 we netted 6.47 cents on every dollar sold.  We have lost 2.63 cents in four fiscal years.  At that rate of decline we will be down to 1.21 cents by the end of FY2021. 

    Last fiscal year we increased our sales by $206 million and netted $1 million for our efforts.  Our cost of doing business on every dollar of that $206 million was 99.5 cents, netting us one half of one cent on every dollar sold. 

    To those of you that derive income from us, we are not out to harm you.  Our only goal is to keep charities contributing to their missions and communities.  If we accomplish that, then by extension and necessity, you will be needed.  But, we need your help in convincing the legislature and Governor that things need to change and change soon.  Act before it is too late for either of us.  I am not crying wolf, I am asking you to face the facts.  My instincts tell me that dropping below 2 cents for missions will be the breaking point for hundreds of organizations.  Do you really want to see if my predictions are correct before you act?  At that time it will be too late. 

    You can say whatever you want about me or Allied Charities, but you cannot ignore the numbers and trends.  With no changes to the current prize payout/expense/tax/fee structure we are on a collision course to zero profit.  When charities are done, everyone connected to us will be too. 

    Al         


    fy2017 11192017.pdf

  • 20 Nov 2017 06:52 | Allen Lund (Administrator)

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