N.C. Senate tax plan could wallop nonprofit groups

May. 09, 2013 @ 08:38 AM

One provision of a Senate bill seeking to cut taxes by $1 billion would hit some Caldwell County nonprofit organizations hard.

The proposed legislation, unveiled by Senate Republican leaders Tuesday, would deprive nonprofit organizations of refunds on the sales taxes they pay.

For Caldwell Memorial Hospital, which also runs nonprofit the Caldwell Memorial Foundation, receives some $900,000 in state tax refunds every year, said Laura Easton, the hospital's president and CEO. Although that amounts to only 1 percent of its budget, Easton said, the loss of refunds could result in a decrease of charitable health care services – totaling about $1.3 million last year.

“I don’t know what the answer is – I don’t want to know what the answer is,” she said of how the hospital would make up for losing that money.  “I really think that the community, everyone, needs to step up and say this shouldn’t happen.”

Nearly 275 nonprofits across Caldwell County are eligible for sales tax refunds from the state. They range from church congregations, foundations, volunteer other charitable organizations usually involved in health and education sectors.

Habitat for Humanity in Lenoir would stand to lose a “significant chunk of change,” about $15,000 in refunds of the sales tax on construction materials and payments to subcontractors to build an average of seven to nine homes across the county every year, executive director Pete Kidder said.

“I have a lot of houses to build,” Kidder said. "We need as much money as we can get.”

He said the proposed change poses a “huge” threat to the “nonprofit sector’s ability to serve families in need.”