On Behalf of Diving Industry, Ingram Discusses Association and Small Business Issues with Offices in the U.S. Senate and House
DEMA’s Executive Director Tom Ingram has spoken with members of the U.S. Senate and House of Representatives and their staffs in Washington, D.C. on behalf of the Diving Industry, DEMA and the Association Industry. Ingram joined four other association executives as part of a delegation from California sponsored in part by the American Society of Association Executives (ASAE), and provided information critical to DEMA to officials in the offices of Senators Dianne Feinstein (D-CA) and Barbara Boxer (D-CA), and Representatives Darrell Issa (R-CA), Duncan Hunter (R-CA), Susan Davis (D-CA), and Scott Peters (D-CA). Issues on the meeting agenda directly impact the Diving Industry as well as DEMA Show; attendance and non-profit tax status.
Since 2010, the Office of Management and Budget and the current Administration have taken a number of aggressive steps requiring all agencies to reduce conference and travel budgets with of goal of reaching 70 percent of FY 2010 levels and keeping those reduced budgets in place through FY 2016. The Administration has also instituted a series of internal measures to tighten the approval process for travel and conference-planning.
DEMA understands and agrees with the need for fiscal responsibility and the reduction of unnecessary spending. However, blanket restrictions that prohibit travel, especially in response to isolated incidences, are shortsighted. The dual goals of public-private partnership and good government can be achieved simultaneously without severing attendance at private meetings. The private sector’s ability to coordinate vital education as well as dialogue at meetings and conferences for government and private sector employees is beneficial to all. Such dialogue leads directly to the sale of equipment. Significant numbers of federal employees currently attend DEMA Show, many to learn about and purchase equipment from diving manufacturers or to receive training on repair and maintenance, and to learn best practices. Oftentimes, important working relationships are formed by post-education discussions following up on the topics presented, making other technologies such as teleconferencing and video conferences less useful than face-to-face communication. DEMA has seen a reduction in the number of federal employees attending DEMA Show since 2010.
Item two on Ingram’s meeting agenda dealt directly with DEMA’s ability to provide resources back to the Diving Industry. As congressional leaders continue to discuss overhauling the U.S. tax code, which has become overly complex and burdensome for American businesses and middle-class families, two provisions could negatively impact the revenue streams of many associations, including DEMA. These provisions would change the tax treatment of so-called “royalty” income and certain qualified sponsorship payments.
A “royalty” is the money paid for the use of intellectual property such as an organization’s name, logo, copyrighted content or mailing list. For example, banks pay royalties to tax-exempt organizations for use of their name or logo on affinity credit cards. Royalties are currently regarded as “passive income” because the organization has entered into a licensing arrangement for use of its name or logo but is not actively involved in the marketing or administration of the product or service. The discussion draft released last year by then-Chairman Dave Camp proposes to treat such royalty income as an unrelated trade or business that is subject to unrelated business income tax (UBIT). Revenue from royalty agreements is reinvested in education, promotions and other activities. The proposal to subject this income to taxation would reduce DEMA’s ability to provide these services to members.
Sponsorships for non-profit organizations are also under scrutiny as the tax code revisions are developed. Currently qualified sponsorships, from which a business sponsor receives an acknowledgement or “thank you,” are not treated as unrelated business income and not subject to tax (e.g.: “The Keynote Address, Sponsored by Ajax Corporation.”). The Camp plan proposes to render some qualified sponsorship payments taxable, reducing the funds that can be reinvested in the Diving Industry to create promotions and education, pay for legislative advocacy and more.
DEMA will continue to monitor these issues and provide input to our elected officials as other issues arise.
