Regular Member Meeting 2010 07 13
Note: This page serves as the 2010-07-13 Member Meeting's agenda (before the meeting) and minutes (after the meeting).
Time and Location
July 13, 2010 Meeting called to order at ___ by ____
Approval of Previous Meeting's Minutes
HacDC Transaction Detail by Account
Date Type Num Name Memo/Description Split Amount Balance
06/01/2010 Check 1087 St. Stephen and the Incarnation Episcopal Church rent and inet Rent or Lease -2,000.00 -2,000.00
06/01/2010 Check 1086 Andrew Righter lathe Supplies -400.00 -2,400.00
06/03/2010 Check American Express POS Office Expenses -7.95 -2,407.95
06/17/2010 Check CDFinanc POS pos Office Expenses -100.38 -2,508.33
06/25/2010 Check Intuit Quickbooks quickbooks Office Expenses -10.55 -2,518.88
06/30/2010 Transfer Paypal 3,756.00 1,237.12
Total for BBT Checking $1,237.12
06/01/2010 General Journal 3 -SPLIT- 0.11 0.11
06/30/2010 Transfer BBT Checking -3,756.00 -2,004.46
Total for Paypal $ -2,004.46
Total for Membership Dues $1,688.75
Non Profit Income
06/02/2010 Sales Receipt 1056 Friend of HacDC Paypal 12.68 12.68
06/09/2010 Sales Receipt 1068 Lathe Donation Paypal 50.00 62.68
Total for Non Profit Income $62.68
06/03/2010 Check American Express POS BBT Checking 7.95 7.95
06/17/2010 Check CDFinanc POS BBT Checking 100.38 108.33
06/25/2010 Check Intuit Quickbooks BBT Checking 10.55 118.88
Total for Office Expenses $118.88
Rent or Lease
06/01/2010 Check 1087 St. Stephen and the Incarnation Episcopal Church BBT Checking 2,000.00 2,000.00
Total for Rent or Lease $2,000.00
06/01/2010 Check 1086 Andrew Righter BBT Checking 400.00 400.00
Total for Supplies $400.00
06/01/2010 General Journal 3 -SPLIT- 0.11 0.11
Total for Interest Earned $0.11
Total for Income $1,751.43
Total for Expenses $2,518.88
Net Ordinary Income $ -767.45
Net Other Income $0.11
Net Income $ -767.34
Total Liabilities and Equity as of June 30 $ 8,953.99
Vice President's Report
Tim Slagle, Adafruit.com and tax issues
Adafruit.com announced they would give wholesale pricing to hackerspaces, and I volunteered to sign us up and coordinate orders. I also was concerned about non-profit and tax issues so I did some investigating. Here is a summary of what I did and found:
- I signed HacDC up with Adafruit's hackerspace program using email address firstname.lastname@example.org (so I would get order correspondance.)
- Once logged in, the website shows different pricing but ordering process is basically the same
- Typical kit discount is 10% for Qty 1-9, 20% for 10-24, 30% for 25-49, and 40% for Qty >= 50
- Discount is less for items Adafruit resells (like XBees and FTDI serial programming cable)
- Adafruit offers quantity discounts for the general public so at Qty 10 the hackerspace discount doesn't save us much
- Minimum order is $250
I had some concerns about (1) the impact of such sales on our non-profit status, and (2) whether sales tax would be owed on the transactions:
1. According to IRS pub 598 on Unrelated Business Income of Exempt Organizations,
"Any trade or business in which substantially all the work is performed for the organization without compensation is not an unrelated trade or business". So we are okay non-profit wise as long as people are volunteering to do the work.
2. For sales tax, I spoke with the DC Office of Tax and Revenue (202-727-4TAX) and also a sales tax auditor Wayne Nickum (202-442-6586).
- DC expects 6% sales tax on any sales of "tangible personal property" in the District
- HacDC non-profit status doesn't matter for sales to individuals, and there is no "de minimus" threshold of sales
- Sales tax paperwork is minimal once account is set up - more work in keeping track of sales
So, I think sales tax is an issue that we have to think about.
To avoid paying sales tax on kits used in HacDC functions, we could use a donation model where people pay an optional recommended donation in exchange for using a HacDC-purchased kit we would have in stock. Daniel Packer and I liked idea of having a stock of kits available for impromptu workshops and uC Monday activities.
Concerns about the "donation" model:
- We would be buying kits and parts using membership revenue money - buying Qty 10 kits will cost hundreds of dollars, so membership support and approval is needed
- I wouldn't want to tie up member money in inventory that isn't selling or getting used when it could go for other important things
- Donation model is self-service and vulnerable to theft. This was less painful when parts are donated but HacDC could be out hundreds of dollars if a bin goes missing
There are other possibilities for avoiding the sales tax, like charging a tuition for a class and then have the kit or parts be part of the supplies given in the class, but I don't have a definitive answer yet.
However, I am not comfortable taking orders from individual members under the "donation" model as it would look like we are evading sales taxes. Also our current self-service parts "store" currently stocks donated items and is not really set up for purchased inventory, which both Dan Barlow and I agree should be kept separate and more carefully accounted for. So, I would propose that if we want to do individual Adafruit (or other purchased parts) orders, we treat them as a resale and would need to charge sales tax. Unfortunately the 6% sales tax we'd have to add largely offsets the 10% hackerspace discount for small quantities, so I think the main advantage of the Adafruit discount would be for workshops where >=25 kits would be bought at one time.
I can still put together individual orders if people want, and I am willing to do sales tax paperwork and accounting (at least for Adafruit orders). The first order would be a set of kits to have on hand for build workshops and uC Mondays, but I think membership approval would be needed for me to spend the money. So, for the sake of discussion, I would propose the following order:
|Qty||Desc||List Price||Our Cost||Total|
|10||DC Boarduino Kit||$15||$14||$140|
|10||Arduino Protoshield Kit||$11||$10.50||$105|
|10||Game of Life kit||$15.75||$14||$140|
As can be seen, the costs add up when ordering in quantities of 10. I'm happy to get whatever anyone wants and can agree on so don't worry if you don't like these items - maybe we can discuss it more on the Members list.
- Lathe commitments
- Tool policy
- House warming party / Raffle
Adjourned at _______.