In July 1996 the Australian Taxation Office (ATO) published “The Club Pack – a taxation guide for clubs, societies and associations” (ISBN 0 642 25313 7). This publication is available free of charge from all ATO offices.
The guide refers to three categories of tax status:
- Taxable organisation:
An organisation that is neither a non-profit nor an income tax exempt organisation.
- Non-profit organisation:
An organisation that has a written constitution that prohibits the distribution of profits to its members but is not established for an exempt purpose.
- Income tax exempt organisation:
An organisation that is non-profit and is established for an exempt purpose.
Engagement in the research of family histories qualifies as a “science” and organisations for which this is their main aim may therefore be eligible as qualifying under Section 23 (g) (ii) of the Income Tax Assessment Act.
If in doubt check with your professional adviser or refer to the ATO.
Note: If your society does not have a written constitution it will be considered to be a taxable organisation. If it has a written constitution but this does NOT have the appropriate “non-profit” and “dissolution” clauses it will be considered to be a taxable organisation. Taxable organisations are liable to pay tax on any amount of taxable income @ 36% and are required to lodge an income tax return after 30 June of each year (on Form C).
Read “The Club Pack”!
Donations of $2.00 or more to public libraries are allowed to the donor as deductions against personal income and serve to reduce the amount of taxable income and hence tax payable. This can be an incentive to members of societies to increase donations to their society, particularly if the suggestion is included on membership renewal forms. Receipts must be provided to donors stating that the donations are tax deductible.
In order to be eligible for this concession approval in writing must be obtained from the ATO under Section 78 (4) of the Income Tax Assessment Act (ITAA).
When applying, a society will probably be required to produce a copy of its latest accounts plus its written constitution which should include “non- profit” and “dissolution” clauses (see NOTE: under 1. above). Confirmation of the fact that its library is open to non-members (the public) with the application will help.
These notes are prepared for the assistance of family history and genealogical societies that are members of the Federation. They do not purport to provide a full account of income tax and sales tax laws or provide legal or other advice. Societies should read the relevant acts and obtain appropriate legal advice where required.