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Australian churches collectively raise billions of dollars a year – why aren’t they taxed?

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There’s a good reason why your local volunteer-run netball club doesn’t pay tax. In Australia, various not-for-profit organizations are exempt from paying income tax, including people who perform charitable activities, resembling churches.

These exemptions or credits might also apply to other taxes, including fringe advantages tax, state and native property taxes, and payroll taxes.

The traditional justification for granting these concessions is that the charity advantages society. They contribute to the well-being of the community in a variety of non-religious ways.

Churches and other nonprofit organizations run a big selection of programs that profit society.
addkm/Shutterstock

For example, charities offer social, health and academic services that might otherwise be provided by the federal government because of their obvious public advantages. Tax exemption, which allows a charity to maintain all funds raised, provides the financial support required to alleviate the federal government of this burden.

The nonprofit sector is usually called the third sector of society, the opposite two being government and for-profit enterprises. But in Australia this third sector is sort of large. Some grassroots organizations are small in scope, but other nonprofits are very large. And many of these larger entities – including some “megachurches” – run huge business enterprises. They are sometimes indistinguishable from comparable business activities within the for-profit sector.

So why is that this income not taxed? And should we actually give all nonprofits the identical tax breaks?

Why don’t churches pay taxes?

The primary purpose of a church is to develop or promote its religion. This in itself counts as a charitable purpose inside the meaning of Art Charities Act 2013. However, section five of the Act requires that the Church have exclusively charitable purposes – every other purposes have to be incidental to or supportive of them.

Seen individually, operating a church with extensive business activities – which can include selling merchandise or hosting concert events and conferences – just isn’t a charitable purpose.

Audience and performers at a Hillsong concert
Some large churches sell concert tickets on a business scale.
Pixelite/Shutterstock

However, Australian case law and ATO ruling each support the view that conducting business activities could also be incidental or may support a charitable purpose. This could possibly be the case, for instance, if the business activities of a large church were intended to assist further its charitable purposes.

For this reason, under current Australian income tax law, a church operating a large business enterprise can retain exemption from income tax on profits from that business.

There are various public policy concerns related to this. First, forgone tax revenues are more likely to be significant, although the federal government’s annual tax expenditure statement doesn’t currently provide an estimate of the quantity of foregone tax revenues.

Secondly, tax exemption may end in dishonesty. A for-profit enterprise competing with a church in a given industry could also be at a competitive drawback – despite similar operations, the for-profit entity pays income tax, while the church doesn’t. This competitive drawback could also be reflected in lower prices for church business customers.

What about taxation of their employees?

Churches that run large-scale businesses likely employ many employees. Generally speaking, all normal Australian tax rules apply to how these employees are paid – for instance, employees pay income tax on these wages. Distributing profits amongst members can be contrary to the atypical principles of the Church, and that’s what this prohibition is required in any case, for the organization to qualify as a charity.

a man in a leather jacket standing on a stage in a church holding a microphone
All salaries paid to church leaders are taxed in the identical way as private sector salaries.
Manuel Filipe/pexels

Some churches could also be criticized for paying founders or leaders “excessive” salaries, but these are still taxed in the identical way as normal salaries.

It is essential to contemplate fringe advantages tax, which employers must pay on certain advantages they provide to employees. Apart from some qualifications, all the things as usual rules for taxation of additional advantages apply to non-wage advantages provided to church employees.

Like their business (and taxable) counterparts, payments for “luxury” travel and lodging for church leaders and employees while on duty is not going to generate a taxable fringe profit amount for the church.

However, there’s one caveat: the church will probably be the church rebateable employer under the perimeter advantages tax system. This means you may get tax relief on advantages provided to every worker, as much as a specific amount.

We might have to rethink general tax exemptions for charities

At a time when nonprofits were mostly small and focused on meeting the needs of people underserved by the market, it seemed appropriate to exempt such charities from income tax.

However, in modern times, some charities – including some churches – run huge businesses and collect rents on vast estates.

Many persons are currently questioning whether we should always proceed to supply them unlimited income tax relief, especially if there are concerns concerning the proper use of these profits.

Debates about solutions to the issue have focused on various arguments. However, it might have more data on how charities allocate their profits to charitable causes, especially those with significant business activities.

An all-or-nothing rule that excludes your entire charitable sector may now not be useful if it doesn’t consider the very different circumstances of different nonprofits.

This article was originally published on : theconversation.com
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Business and Finance

Top-earning LIME Painting franchisee celebrates success and community –

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R.L. Hunnicutt, LIME Painting Oklahoma City Franchise


BLACK ENTERPRISES first mentioned by R.L. Hunnicutt in an October 2022 article “Oklahoma City’s only upscale painting franchise is Black-owned and committed to ‘leaving the door open’ for others to follow.” Two years later, Hunnicutt’s LIME painting The franchise continues to grow. This will be attributed to his understanding that a successful business is built on strong relationships and a real connection to the community. Through various community-focused initiatives, Hunnicut actively partners with local organizations, schools and non-profits to support urban development and enrichment projects.

Whether it’s revitalizing community centers, painting schools, or offering free services to underfunded local institutions, Hunnicutt ensures that his work contributes to the well-being of his neighbors. In addition to his hands-on projects, he is devoted to constructing lasting relationships along with his clients, providing exceptional service and maintaining an unwavering commitment to quality. Hunnicutt’s fame for reliability and excellence has made LIME Painting a trusted name within the OKC area, further strengthening his ties to the community.

In honor Junewe caught up with Hunnicutt and asked him to share his insights on how the meaning of the vacation manifests itself in his business.

BLACK ENTERPRISES: Juneteenth is a celebration of freedom, empowerment and community. How does your franchise promote and/or have fun these principles?

RL HUNNICUTT: I’m currently working with This is My Community Foundation, which is an initiative that helps underprivileged youth and adopted children and helps families stay together in northeast Oklahoma City. I check with local students about entrepreneurship and offer them internship opportunities with my company. I speak and mentor about 10-15 kids at college. The children are mostly minorities and come from economically disadvantaged backgrounds.

TO BE: Why is African American business ownership crucial to the American landscape?

HUNNICUTT: African American business ownership is central to the American landscape for quite a lot of reasons. First, it provides diversity to the economy, which helps generate revenue through unconventional and often neglected methods. The black dollar is robust in America and is over a trillion dollars. Then it creates freedom. When you run your individual business, you may dictate what you ought to do. You not must wait to your boss’s approval. Now you control your path. The sky is the limit and you will have the liberty to do what you ought to make a difference.

TO BE: What advice do you will have for young African-Americans about entrepreneurship?

HUNNICUTT: Put God first. Without Him nothing is feasible. Then be consistent and persistent. Finally, eliminate your plan B. If you will have something to fall back on, you will certainly do it. Make sure your corporation is all it’s worthwhile to focus and work on. If you haven’t got anything to fall back on, you will approach every day like a hunter intent on conquering all the pieces in your path!

Hunnicutt is considered one of the best-earning LIME Painting franchise members, showing which you can run a successful business while caring for your community and paying it forward.


This article was originally published on : www.blackenterprise.com
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Business and Finance

Reginald Lewis’ daughter opens Beatrice Advisors

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Christina Lewis, Reginald Lewis, Beatrice Advisors, Reginald Lewis


Daughter of a superstar Black financier Reginald Lewis followed in his father’s footsteps opening Beatrice Advisors to assist families like hers.

Christina Lewis opened an organization publicly on June 13 in New York. It is the primary multifamily office of its kind to be owned by a Black woman. Meredith Bowen, former partner at Seven Bridges Advisors, will function president and chief investment officer. With a few of their assets coming from the family business BFO21 and Lewis’ personal network, the band is pushing to maneuver away from the established order of occupying a particular area of interest.

Lewis’ goal is to spotlight the importance of getting a tax-efficient portfolio for the following generation of heirs, entrepreneurs and multiracial families like hers. He also desires to set a regular for having a solid team of investment managers, lawyers and accountants that clients can trust and never feel obliged to do.

“The next generation may be very uninformed, just like me and my whole family were when my dad died,” she said, recalling her father, who died when she was 12.

“He had all the intellectual capital around investing and financial access, and of course he never expected to die at 50.”

Her father was the one black person on Forbes’ list of the 400 richest Americans after appearing on the list in 1991 – with a net price of $340 million and an estimated net price of $400 million – which increased in 1992 that very same 12 months he was diagnosed with a terminal brain tumor and died in January 1993, aged just 50.

His estate was left to his wife Loida Lewis and daughters Christina and Leslie. Now, greater than 30 years later, she lives by the three mantras her father left her: do your homework and follow it, make a plan and follow it, and be good at your job.

Beatrice, apparently named after the landmark Beatrice acquisition, which was curated by Christina’s father and have become the primary Black-owned billion-dollar company, offers clients single-family offices and an progressive and technology-driven approach that encourages clients to tailor their investments to suit their individual goals. The current offer includes three key services: investment management, financial planning advice for clients and own investments.

However, Lewis doesn’t stop there and plans to expand his business over time.

Former vp and financial advisor at Shufro, Rose & CoMichael Hymes will function managing director and head of client advisory on the chief team. Bowen spoke highly of Lewis’s leadership she said she was excited to be a part of a “new level of autonomy”.

“Meeting customers where they are now and where they will be tomorrow, while giving them a new level of autonomy, makes Beatrice’s offering an exciting one,” Bowen said.

“Christina has demonstrated an exceptional ability to drive meaningful change, and I am excited to work with her and the team to build a truly differentiated set of solutions for our clients.”

The latest investment firm owner also serves as vp of the Reginald F. Lewis Foundation and is an executive producer of the upcoming biopic about her father’s life, named after his autobiography, “Why Should White Guys Have Fun?”


This article was originally published on : www.blackenterprise.com
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Business and Finance

4 ways to protect your credit during the holidays

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Black-Owned Credit-Building App, Michael Broughton


The holiday season is sort of here. But before you finalize your plans, stop and be certain that you are not practicing behaviors that might jeopardize your credit.

Falling into vacation mode – and the charging frenzy that comes with it – is what gets lots of us into trouble. Here are 4 ways to keep your credit in great shape during the holidays:

Don’t apply for retail credit cards

Getting 10% off your purchase really is not value it in the long term. Opening a brand new account could mean problems for your credit rating, as the length of your credit history accounts for 15% of your FICO rating. The older your credit age, the higher, because it shows you’ve a protracted history of credit management. Opening a brand new credit card account will lower your overall credit age and, subsequently, your rating. Applying for a loan also signifies that an inquiry can be processed on your report. Inquiries make up 10% of your FICO rating.

Be careful when shopping online

If you might be purchasing gifts online, remember to only visit sites you might be conversant in or have done business with in the past. Don’t share your credit card number with anyone.

Don’t overload

Be careful how much you spend. If at the end of the month you might be unable to repay the amount charged, reconsider your purchases. Overcharging your card will end in a rise in the amount due. Amounts owed are 30% of your FICO rating.

Don’t forget to pay your bills

It could appear obvious, but when traveling and visiting relatives, it is easy to forget to pay the bills. Set reminders on your calendar or automatic bill payments so you do not miss a payment and get a negative mark on your credit report. Your payment history accounts for 35% of your FICO rating.


This article was originally published on : www.blackenterprise.com
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