Indian Wells residents in November will consider a proposed update to the city event-admissions tax ordinance, clarifying which nonprofit organizations qualify for an exemption from the levy.
The ballot measure, “Measure H: Clarifying Nonprofit Exemption from City Admissions Tax,” would update the municipal code to specifically identify qualified exempt organizations by their federal tax classifications, including Section 501(c)(3) — religious, charitable and education groups — and Section 527 — political organizations.
Other organizations that could qualify under the measure include membership organizations such as social clubs, labor unions or veterans’ groups, and federal, state and local governmental agencies and associations.
The measure would require organizations to be in good standing and maintain their federal tax-exempt status.
“If an organization is exempt, residents and visitors attending the organization’s event do not pay the admissions tax,” according to the city’s website.
In 2005, voters approved Measure H, which established a general admissions tax at a maximum rate of 10% of the admission charge. Although the measure provides tax exemptions for some nonprofit organizations and event sponsors, city officials said the language defining those exempt organizations “relied on more than general terms rather than precise legal definitions.”
The City Council voted July 2 to place the updated measure on the ballot.
“Updating the municipal code allows us to safeguard tax-exemption benefits for residents and visitors supporting local charitable, educational organizations,” Mayor Toper Taylor said in a statement. “Measure H reflects our ongoing commitment to our nonprofit partners and community organizations without creating new taxes or increasing tax rates.”
City officials said the proposed measure will keep the tax rate at a maximum rate of 10% if adopted, and it will not raise or create any new taxes for residents.