[OSGeo-Conf] Tax Implications of FOSS4G

[Cameron Shorter]

Washington and Portland,
I invite you both to comment on Steve's recommendations about passing on 
tax exempt status. Is this something that you propose to offer?

Washington,
I invite you to comment on Steve's observation that Eclipse's 
administration costs appear to be significantly more than for Portland.

On 11/07/2013 1:41 PM, Steve Swazee wrote:
> Cameron,
> Out of my intent to get folks thinking about FOSS4G tax implications in the
> long term....I've walked into a minefield in the short term.
>
>  From my review of various documents, it would appear neither group is
> showing the event closeout payment to OSGeo as a taxable event.  Putting
> aside venue, food, AV and other similar fixed costs for both events, it
> appears to me that Eclipse has total staff and administration charges of
> about $156,000 + a cut of the excess, versus Portland at a flat fee of
> $50,000 for approximately the same administrative services.  This
> circumstance accounts for a significant delta of potential money in OSGeo's
> pocket.  In a tax paid environment using the ~900 attendee event numbers,
> the current Washington DC profit comes in at approximately $42,500 ($50,000
> - $7,500 taxes) profit, while Portland comes in at approximately $109,979
> ($152,799 - $42,833 taxes).  Make both events tax exempt, and the take home
> numbers come in at $50,000 for DC versus $152,779 for Portland.  Obviously,
> the magnitude of the tax implication grows significantly as the potential
> profit goes up.  To be certain, these event numbers are projected based on
> best guesses by both groups of organizers - but they do demonstrate the
> concept.
>
> Both the Eclipse Foundation, Inc. (DC) and Stumptown Syndicate (Portland)
> are IRS approved tax exempt organizations in the U.S.  However, there is a
> big difference in the pigeon-holes that they are in, and their various
> umbrella capabilities as a result:
> - I will defer to the Eclipse Foundations legal staff to comment on whether
> or not a 501 (c) 6 (trade organization) is capable of extending its tax
> exempt status.
> - As a 501 (c) 3, Stumptown Syndicate (charity) is clearly capable of doing
> what I have suggested, if they wish.
>
> If I understand circumstances correctly, OSGeo was more than 27 months old
> before it filed its latest request for tax exempt status with the IRS.  As
> such, if tax exempt status is granted at some point in the future, it is my
> understanding that OSGeo will only be entitled to tax free income (as a
> self-standing nonprofit) from the date of the postmark of its latest
> application to the IRS.  Consequently, per your question about putting this
> plan in motion - it amounts to a willingness on the part of OSGeo to ensure
> for the time being that event contracts are appropriately structured and
> executed if protecting the organization's main source of income from taxes
> is a concern.  If not, pay the tax man.  Otherwise, run the risk that
> another IRS denial of tax exempt status at a future point in time will bring
> the tax man pounding on the door for....back taxes.
>
> Again - FWIW.
>
> Best Regards,
> Steve
>
>
> -----Original Message-----
> From: Cameron Shorter [mailto:cameron.shorter at gmail.com]
> Sent: Tuesday, July 09, 2013 11:24 PM
> To: sdswazee at sharedgeo.org
> Cc: 'Darrell Fuhriman'; conference_dev at lists.osgeo.org
> Subject: Re: [OSGeo-Conf] Tax Implications of FOSS4G
>
> On 10/07/2013 3:32 AM, Steve Swazee wrote:
>> Given Denver generated approximately a $120,000 profit, I don't think
>> it is at all unreasonable to believe 2014 will generate at least
>> $150,000.  That's a tax bill of approximately $41,750.  You can buy a
>> whole bunch of USB's, student admissions, OSGeo banners, code sprints,
>> etc. for that kind of smack.  It's a $41,750 question that all boils down
> contract construction.
>> The trick on that last point is making sure you crawl in bed with the
>> right party.
> Steve,
> You have provided some excellent advice here. What I'm unclear on is whether
> either of the FOSS4G 2014 proposals are offering tax exempt status as you
> are suggesting?
>
> Or alternatively, what is involved in putting your advice into practice?
>
> --
> Cameron Shorter
> Software and Data Solutions Manager
> Tel: +61 (0)2 8570 5050
> Mob: +61 (0)419 142 254
>
> Think Globally, Fix Locally
> Geospatial & Data Solutions enhanced with Open Standards and Open Source
> http://www.lisasoft.com
>


-- 
Cameron Shorter
Software and Data Solutions Manager
Tel: +61 (0)2 8570 5050
Mob: +61 (0)419 142 254

Think Globally, Fix Locally
Geospatial & Data Solutions enhanced with Open Standards and Open Source
http://www.lisasoft.com