The Taxman Cometh for the AMC?

[Waumbek]

From the Coos County Democrat, Lancaster NH:

"Selectmen to ask AMC tough tax questions

By Edith Tucker
TWIN MOUNTAIN Ñ Town counsel Bernie Waugh of Gardner Fulton & Waugh PLLC of Lebanon and Avitar assessor Dave Woodward will work hand in hand, the selectmen said on Monday night, to figure out what the assessment of the Appalachian Mountain ClubÕs Highland Center Ñ a $9 million, three-main-building complex on Route 302 at the top of Crawford Notch Ñ should be.
In 2001, the selectmen agreed to accept a $10,000 annual payment in lieu of taxes, known as a PILT, but a couple of years later the board learned from attorney Waugh that it is possible to grant only partial exemptions to a charitable organization like AMC, if only part of its property is Ôused and occupiedÕ for the its charitable purposes.
At the time, the attorney said that after reviewing a number of cases there were enough questions in his mind that he thought the matter would be worth pursuing.
Now that state inventory and other required tax forms have been filled out by AMCÕs Boston, Mass., office, the selectmen agreed that it is time for them Ñ or their designees Ñ to undertake an evaluation of AMCÕs sales at the complex: which are legitimately not-for-profit educational activities and which are outside its mission and fall, for example, into touristsÕ vacation or business convention use.
The selectmen Ñ chairman Jay Ouelette, Bill Wright, and Al Strasser Ñ all agreed that they believe this is a matter that should be vigorously pursued."

 

[David Metsky]

Bernie Waugh is a buddy of mine from college. I should drop him a line but I'm sure he can't say much about the pending legal actions.

-dave-

 

[chomp]

Great news - I am glad that someone is going to hold the AMC accountable for their decidely un-non-profit activities.

 

[Gris]

Ditto to Chomp's comment - LL Bean-dome exposed!

 

[darren]

I like "Bean-gate" much better.

- d

 

[Gris]

Ooooh, THAT'S catchy!

 

[Rick]

....And I NEVER thought I'd smile when thinking of paying taxes. I feel all giddy inside!!!!!!

 

[linehant]

>>which are legitimately not-for-profit educational activities and which are outside its mission and fall, for example, into tourists vacation or business convention use. <<

Heard about the tax negotiations last week-end. Also heard that, at one point, before AMC acquired the property, Storyland was eyeing the parcel - presumably to build another "theme" park.

No doubt the town would have preferred the more substantial revenue stream that would be generated by a for-profit business such as Storyland. But then there would be that whole discussion about the "character" of the notch to consider.

Don't know anything about "convention" use. Any time I've stayed at Shapleigh (and the one time I stayed at HC), there were educational programs being run: training sessions for smoke jumpers, programs that introduce inner city kids to hiking, etc., Elderhostel, AMC's own educational programs. At what point does an education program cease to be "mission oriented" and become a "convention"?

One COULD argue that all but one of my stays were "tourist" vacations as I wasn't involved in an educational program. But that begs the question of whether properties owned by **any** not-for-profit group - such as a ski club, for example - should be taxed as commercial enterprises (and I don't know if those properties pay commercial tax or not). Those organizations exist, and its properties are owned, to provide less-expensive vacation alternatives for the club members.

As much as the AMC, like the rest of, would prefer to minimize the taxes it pays, they seem to realize that Highland Center straddles the line between education center and hotel/restaurant. I mean... golly... if they're going to have a wine list at dinner.... Hence the negotiations that took place - and WILL be taking place.

Given the choice between something like Highland Center and a "baldly" commercial operation like.... dunno... Storyland, I'd rather see Highland Center. Have to leave it to the negotiators to figure out which is an educational use of the facility and which is a "commercial" use. Monasteries and convents have, for years, been employed to host "retreats" of various sorts that are not "connected" to the primary "mission" of the facility. Presumably they've had to address similar issues regarding taxation. Perhaps those would serve as a "model" for the discussion about HC.

 

[funkyfreddy]

I have mixed feelings about the whole situation as I do the AMC, for reality is never quite as simple as politics would have it, and the mix of money and politics has always been ugly.

Do I prefer the AMC to Storyland and snowmobiles - YES! Am I a fan of the Highland Center - not really. The AMC has done good things and some questionable ones. In my opinion their current leadership has muddied their mission and acted with a heavy corporate-like footprint.

Still, in the long run I don't think the AMC deserves to be demonized, just watched and questioned now and again.

 

[RGF1]

About Time

A few have mentioned that the owners of Storyland had their eyes on the site. I am not sure if this is true. If I recall correctly the AMC owned and of course still owns the land the “Crawford Resort and Conference Complex” is located on. . That being said after a recent hike in the notch, I went there to check the resort out. Yes it is a resort.. One thing I learned is that hikers cannot stop in for a cold beer and sandwich after a hike. The place is very expensive and looks more like a high-end hotel and spa than a place for hikers. I got a kick out of all the merchandising. I think the whole organization has morphed into a outfitting and resort company. Maybe not only should they pay taxes but they should pay the commercial recreational special use permit for their Huts. Personally I do not have a problem with people who use them or them even being there but lets call them for what they a commercial outfitting venture.
For those who do not know there is a huge difference in the how much you pay for a for profit special use permit. I know that one guiding outfitter out west pays about $ 25,000 just to guide on the 14,0000 foot peaks in the Elk range and another 25k for rock climbing then more for packing and using pack animals for overnight trips. And they have to jump through all kinds of bureaucratic hoops. Maybe it is time for the AMC to be treated for what it is. They sure do act like a outdoor resort and guiding outfitter with a near total monopoly in the Whites. At one time the AMC did a lot of good things With the Crawford Complex they have completed their transformation into a corporate outfitter and resort operator. Hey only users of the Crawford Complex are allowed to park there sure it is their land but it just alienates every one else who hike in that popular area .
I guess sometimes the cliché you reap what you sow is true. Go get em Taxman .

Oh Yeah since when was the AMC a Charitable organization? Non Profit at one time but never Charitable

 

[David Metsky]

A few have mentioned that the owners of Storyland had their eyes on the site. I am not sure if this is true.

Back around 1980 when the AMC bought the site on the open market, several other groups expressed intrerest in buying it. Storyland and several hotels were mentioned as possible buyers, I don't know the details. The AMC has held the property for the past 20+ years.

-dave-

 

[danhedonia]

Business and non-profit

Hello! Long-time no post, I'm exquisitely happy to see how many "regulahs" still post here.

I never really felt that bad about the AMC being successful in running a business ... just that I always had hoped that they would acknowledge that that's exactly what they're doing. The thing that used to get my hackles in a lather was the way that the higher huts are run, seemed to be an unfair administration of public lands (members vs. non-members). My wish was that they would see themselves more as stewards than a chain of limited-amenity motels with ultra-cool locations ... and for the most part, I think that's true.

I just recently joined the AMC after a long time, and am sort of looking forward to enjoying the privileges of being a member. I've picked up climbing partners who were staying at the Crawford Notch facility and was just incredibly impressed with the overall apparent quality of the place.

As I've been really out of touch -- I'm curious, is this tax thing indicative of a tension between locals and the AMC that is increasing?

Cheers,
Dan

 

[Sherpa John]

Hey now... no one should be bashing the Highland Center.. After All... they still provide you a place to stay for a "small" fee.

 

[Gris]

Whether the Highland Center (a/k/a the "Ritz") should exist is not the issue in THIS thread. The issue is the old AMC bulletin board dead-horse (insert video) of its not-for-profit status. No one with ANY modicum of objectivity can deny that it is grossly unfair for the AMC to market Bretton Woods ski packages and thus directly compete against local motel/hotel entrepeneurs AND AT THE SAME TIME CLAIM NON-PROFIT STATUS! Question - how many non-profits have a liquor license anyway...?

 

[Blue]

Question - how many non-profits have a liquor license anyway...?

Lots of colleges and universities are non profits and they have liquor licenses.
http://www.hfc.harvard.edu/

 

[Stan]

... render unto Caeser

"Unrelated income" of a non-profit is subject to taxation and I expect there is a connection between the source and both income and property taxes. I've been involved with non-profits and have always maintained that, if we can make money and have to pay taxes, so what? Obviously you'd like to keep all you can but whatever additional revenue can be generated is usually most welcome and helpful.

The disadvantage in not paying taxes (on either income or property) is the loss of revenue to the taxing entity which must otherwise still provide services. There is a competitive disadvantage to tax paying businesses, too, and I'm sure they favor a more level playing field in this regard.

The tax issue is not relevant to the merits of the Highland Center and I don't think anyone changes their opinion of the place, for better or worse, as a result of it.

 

[Gris]

Lots of colleges and universities are non profits and they have liquor licenses.

Good point.

WAIT A MINUTE! What!??! Two wrongs don't make a right!

 

[Pucknuts61]

There are different tax laws within the classification of being "non profit" . Schools, municipalities, and various organizations might be deemed as non profit, but could be treated differently tax wise. Most work on a "funding" system of accounting (Harvard is definitely not in this category, they are a private institiution....but portions within the school maybe non-profit).
The key to this tax problem with the AMC is that they are not using the facility or portions of the facility for charitable purposes as they claim.
Don't get me wrong, non-profit doesn't mean they don't make money. You have to, otherwise your out of business quick. It's purley the tax classification and it would appear that they are operating on the wrong side of the tax laws and using their non-profit status to get an upper hand on "the competition"....then not paying their fair share. Win-Win for them, but the IRS and local officials appear to have caught on and will take a closer look at a lot more than this one facility (personal opinion, but goes to reason).
Simply based on the article, the AMC may have some problems justifying their non-profit status in this case.
It will be interesting to see what happens to say the least.

 

[Waumbek]

Lots of colleges and universities are non profits and they have liquor licenses.
http://www.hfc.harvard.edu/

Yes, they do, but that leaves the false impression that you can step right up and order a drink if you are of legal age and that the academic institution in question makes money on it. Frankly, most colleges and universities would altogether ban alcohol if they could. They don't make money on it; they spend money dealing withn the problems it creates. Getting rid of it would solve so many headaches. Here's the official policy of U. N. H. on alcohol. There's lots more, but I'll spare you the details.

K. Alcohol Policy
1. The University is committed to establishing and maintaining an environment that fosters mutually beneficial interpersonal relations and a shared responsibility for the welfare and safety of others. Because alcohol can have a significant effect on that environment, the University has adopted this policy for governing alcohol use by students, staff, faculty, visitors, and guests. While University policy permits responsible consumption of alcohol at some places and times, the consumption of alcohol should never be the primary purpose or focus of an event. Alcohol-free social events are encouraged, as is the use of third party vendors when alcohol is served.

2. The acquisition, distribution, possession, or consumption of alcohol by members of the UNH community must be in compliance with all local, state, and federal laws.

3. Non-alcoholic beverages must be provided at events where alcoholic beverages are served.

4. Institutional restrictions on alcohol use on UNH property vary by location, and, in some cases, by time. Given the sensitivity surrounding the use of alcohol, those who grant approval for alcohol consumption, as required below, must submit a copy of each approval to the President for filing and record keeping purposes. With the President's consent, deans or vice presidents may designate their approval authority to others. Students should refer to "Student Rights, Rules and Responsibilities" for additional information.

4.1 University residence halls and apartment complexes. Residents of legal drinking age may consume alcohol in their rooms or apartments. Alcohol may not be consumed in common areas such as lounges, hallways, etc.

4.2 Dining halls. During periods when dining halls are not open to students and are assigned to workshops or conferences, alcohol may be served and consumed with the approval of the Vice President for Finance and Administration.

4.3 MUB, Hamel Recreation Center, Field House. Alcohol may not be consumed in these facilities.

4.4 Whittemore Center Arena, skyboxes, and skybox lounge. As a "sports/entertainment complex," state law imposes special restrictions on alcohol consumption in the Whittemore Center arena, its skyboxes, and skybox lounge. For more information, contact the Assistant Vice President for Business Affairs.

4.4.1 Arena and skyboxes. As required by law, no alcoholic beverages may be sold or consumed in arena or skybox seating at any intercollegiate or interscholastic event. Furthermore, this policy prohibits distribution, possession, or consumption of alcohol in the arena or skyboxes at any event either sponsored by a student organization or which attracts a substantial number of audience members who are under the legal drinking age. Consistent with the foregoing restrictions, alcohol may be served and consumed at a limited number of approved events in the arena and skyboxes. The Vice President for Finance and Administration must give the required approvals.

4.4.2 Skybox lounge. Alcohol may be served to private groups at a limited number of approved events in the skybox lounge. The Vice President for Finance and Administration must give the required approvals.

4.5 The New England Center and the President's residence. Alcohol may be served and consumed only in conformity with all applicable laws, regulations, and policies.

4.6 Academic, administrative, and classroom buildings (any UNH building not included in the previous categories). Consumption of alcohol is permitted only as part of an approved event, such as a reception for a visiting scholar or a celebration of a special accomplishment. The dean or vice president who is sponsoring the event must give the required approvals.

4.7 UNH grounds. Consumption of alcohol is permitted only as part of an approved event. Generally, approval will require the use of a third party vendor. The Office of the president must give the required approvals.

5. UNH has an interest in off-premise events held in its name. If alcohol is used illegally or inappropriately at such events, the University may take steps to protect its interests.

6. Any variation from this policy must be approved by the President upon the recommendation of the appropriate senior administrator reporting directly to the President.

 

[dms]

To get non profit status from the IRS is a very involved process. The application is very thorough and detailed. In my experience, a specific IRS investigating officer is assigned to go over the application, and all information is thoroughly reviewed before non profit status is granted. The penalties for abuse of the non profit status are severe. Usually these situations don't arise in a vacuum, there is always a story behind the story, someone stirring the pot, so to speak. It will be interesting to see what happens.