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California: Can Tax Exemptions Stop Discrimination?

  • Apr 17, 2013 | Gail Cole

 California: can tax breaks inspire tolerance?

Update, 9.16.2013: California SB 323 has been ordered inactive. Senator Ricardo Lara, sponsor of the bill, guaranteed last week that "SB 323 is alive and well. ... [W]e will be taking the next few months to work closely with all parties involved to address and refine this legislation." It is expected to resurface in January 2014.

The Boys Scouts of America does not allow openly gay people to join the organization. Now California lawmakers are considering legislation that would take away the organization’s nonprofit tax breaks unless it alters that policy. Can tax exemptions stop discrimination?

California’s Youth Equality Act (SB 323) is “designed to bring youth group tax exemptions in line with California’s existing non-discrimination laws.” It would “eliminate a sales and corporate tax exemption for youth groups that discriminate on the basis of sexual orientation, gender identity, or religious affiliation.” Last week, the bill passed the State Senate Governance and Finance Committee.

A Policy of Exclusion

The Boy Scouts of America website reads:

“While the BSA does not proactively inquire about the sexual orientation of employees, volunteers, or members, we do not grant membership to individuals who are open or avowed homosexuals or who engage in behavior that would become a distraction to the mission of the BSA.”

This policy was reaffirmed in July 2012, sparking a dialogue within the organization and the California Youth Equity Act (EQCA).

An Inclusive Law

EQCA reminds:

“Current California law does not allow state-supported programs and activities to exclude potential participants based on their sexual orientation, gender identity or religious affiliation.”

It lists Boy Scouts of America as “the most egregious example” of this type of discrimination. “BSA’s exclusion of youth like [an openly gay youth] flies in the face of state nondiscrimination law, and yet is rewarded with special tax privileges.” If the California Youth Equity Act becomes law, those special tax privileges would disappear. No more sales tax exemptions for items sold at fundraisers. No more corporate tax exemptions on donations, camp fees, membership dues, and other sources of income. (The Huffington Post).

California’s Youth Equality Act now awaits consideration in the Senate Committee on Appropriations.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.