Page 192 - Washington Nonprofit Handbook 2018 Edition

newsletters of a general informational nature to members; (2) the
conduct of regulatory and legislative liaison or lobbying activities of a
nonspecific nature on the behalf of its members; (3) the conduct of
conventions and shows for its members; (4) the conduct of meetings
and seminars of general and varied interest to its members; and
(5) member discounts for goods and services, which will not cause a
portion of dues to be taxable if those members are separately charged
for the goods and services and the charges are, after discounts, for at
least the full cost of the goods and services.

• Bona Fide Contributions and Donations. Gifts, contributions and
donations received by a nonprofit organization are not subject to the
B&O tax. If the income received is part sale and part gift, the measure
of the B&O tax is the lesser of the selling price or the fair market value
of the item sold. The excess of the selling price over the fair market
value is a nontaxable donation. See RCW 82.04.4282.

• Initiation Fees. Initiation fees are deductible. “Initiation fees” means
those amounts paid solely to initially admit a person as a member to a
club or organization. These fees are only those one-time amounts
paid that genuinely represent the value of membership in a club or
similar organization. An initiation fee does not include any amount
paid for or attributable to the privilege of receiving any goods or
services other than mere nominal membership. See RCW 82.04.4282.

• Tuition Fees. Tuition fees are deductible. “Tuition fees” includes
library, laboratory, health service and other special fees, and amounts
charged for room and board by an educational institution when the

property or service for which such charges are made is furnished
exclusively to the students or faculty of such institution. “Educational
institution” means only those institutions created or generally
accredited as such by the state. An “educational institution” offers to
its students an educational program of a general academic nature. See
RCW 82.04.4282.

• Daycare. Charges for the operation of privately operated
kindergartens are deductible. The Department of Revenue interprets
this deduction to include income received by nursery schools,
preschools, day care providers and privately-operated kindergartens
for the care or education of children who are under eight years of age

WASHINGTON NONPROFIT HANDBOOK -181- 2018