by Chuck Gobel
In a stunning display of bipartisanship, on October 30, ten Republican assembly persons were joined by four Democrat assembly persons to introduce AB 559.
In an equally stunning display of legislative efficiency, on November 14, seven Republican members of the Ways and Means Committee were joined by six Democrat members of the Ways and Means Committee and voted unanimously in favor of the bill and to move the bill to the entire Assembly.
The fiscal note on the bill, which arrived on November 6, indicates that passage of the bill would decrease revenue at both the state and local level. What does this bill do to inspire such swift action in a state that is so strapped for cash at both the state and local level?
Here’s the answer: “Alvarez wants tax exemption” (MJS, November 15, 2007, p7C) The exemption sought is for donations made for preferential treatment to obtain tickets for sporting events. Currently the major universities (UW, UW-M, Marquette, and UW-Green Bay) demand such a donation. According to the article, “The right to purchase is an amount paid to a school or institution in excess of the face value of a season ticket.” (Note: Unbelievably, apparently, the Green Bay Packers already have been granted this exemption.)
This is not a donation! If anyone is confused as to whether this demand is a donation or the ticket price, try to get the ticket without the donation.
This ‘donation’ is the price of the ticket, and as such should be taxed in the same manner as any other ticket is taxed. (Under the bill, the amount that would be a direct sales tax becomes an income and franchise tax credit equal to the sales tax. And just to sweeten the deal, if the credit exceeds the tax liability, the excess can be carried over to a future year.
Why should we, as citizens who pay sales taxes on hosts of things we purchase and need everyday, be concerned?
In addition to the equity issue, which is huge, there is the financial issue. As reported in the MJS article, Alvarez and Vince Sweeney, senior associate athletic director, said if the Department of Revenue were to start collecting the tax on this “donation”, the Athletic Department would owe $400,000 in the first year. Moreover they said if the tax were collected retroactively to 2001 the department would owe up to $2 million dollars. Whoa! Six years of avoiding tax payments! Scofflaws take heart!
Undoubtedly, with the bipartisan support in the Assembly and a Republican and a Democrat sponsor in the Senate, AB 559 is, as the saying goes, “good to go!”
The governor, when it reaches him, should just put AB 559 in his pocket and let it die a quiet and well deserved death.