More Bang For Your Buck?

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More Bang For Your Buck?

A state by state review of state tax exemptions available to charities

This paper was originally presented by Andrew Lind, Director and Nina Brewer, Senior Associate for Corney & Lind webinar.

The charitable sector has an income that far exceeds many other industries in the Australian economy. In 2014 alone, charities had an estimated income of $103 billion. Of this amount, it is estimated that charities spent $95 billion pursuing their charitable purposes.

Charities have been able to utilise the majority of their income (including income that would otherwise be remitted for payment of tax) directly for their charitable purposes largely due to the various tax and duty exemptions and concessions that are available to them. Charities should be taking advantage of the full range of extensive exemptions and concessions available to them, so as to maximise the funds and resources available to improving Australian society.

Many of the exemptions and concessions available to charities are available from State and Territory governments, which differ on a State by State basis.

As 85% of charities operate within only one State in Australia, it is important that they are aware of the tax exemptions available to them in that particular State, as well as understanding the particular requirements and nuances of the law in that State.

This paper will examine the definitions of the term “charity” and how that definition varies between Commonwealth and State governments. It will examine the recent state legislative developments which have narrowed the exemptions and concessions available to charities. It will go on to examine the particular State tax concessions currently available to charities (namely on transfer duty, land tax and payroll tax); some recent judicial decisions on how State tax concessions are being applied; and what scope there may be to see concession or refunds applied that are not yet being taken full advantage of by charities.

The title to this paper has been changed to a question, as legislative changes in 2015 in WA, NT, ACT and SA have narrowed exemptions available. Could this be the sign of a possible narrowing in other States?

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