DeLuca bill would consider charity's expenses to claim sales tax exemption

HARRISBURG, Oct. 18 – State Rep. Tony DeLuca, D-Allegheny, Democratic chairman of the House Insurance Committee, has introduced a bill that would require charities to spend at least 60 percent of their revenue on program expenses in order to qualify for a state sales tax exemption.

Current state law only requires an organization to be licensed as a charity in order to qualify for the state sales tax exemption.

"There have been too many reports of charities spending only a small portion of their expenses on the actual programs," DeLuca said. "Some organizations spend much more on promotional and other fundraising costs and exorbitant salaries for their CEOs.

"This bill would protect Pennsylvania donors by ensuring that the money being donated is going for the purpose intended, and not to line a director's pockets.

"The state should not be giving tax breaks to charities that do not spend a significant portion of their funding on their mission. We need to ensure the charities actually assist communities in order to qualify for this break. Donors deserve to know the money they are giving will benefit their intended groups," he said.

DeLuca said he encourages potential donors to visit the Federal Trade Commission's charity website, ftc.gov/charityfraud to investigate the organizations before donating.

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