The Crustacean Who Bit Back
August 12, 2015
The Maine Lobster Festival was recently boiling with embarrassment after discovering that it had failed to pay sales tax for the past 67 years. The festival celebrates the famous crustacean, and provides grants to local organizations who apply in order to increase community involvement and funding for other nonprofits.
The problem was discovered when the festival hired a new accountant and switched software earlier this year. The accountant asked where the festival’s Sales Tax Certificate was, and found out that they had never applied for one.
The organization contacted the Maine Bureau of Revenue Services to inquire how to fix the situation. It was informed that it would only have to pay back taxes of six years, totaling just over $73,000. This year and in the future a 5.5 percent sales tax on souvenirs and 8 percent sales tax on food will be charged at the festival. This serves as a reminder to nonprofits that sell goods or services: they should be mindful of the tax laws of the jurisdictions in which they operate.
There’s good news for Mainers though: the state has one of the lowest sales taxes in the country, according to Tax Foundation’s mid-year report.
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