INC NEWS - letter: DukeCard purchases are tax-exempt, Durham gets no sales tax (today's Herald-Sun)

[John Schelp]

Letter: Duke a non-profit?
Herald-Sun, 16 December 2005 
 
An earlier letter to The Herald-Sun questioned Duke
for its slow response in expanding the DukeCard system
to off-campus merchants. I'd like to think that the
delay is just the byproduct of a lethargic Duke
bureaucracy, but it seems there may be more than that.


The Oct. 28 Duke Chronicle reported that DukeCard
purchases are tax-exempt, and therefore must be
conducted on campus. So, one of the pizza chains would
deliver a pizza to a dorm, accept the DukeCard as
payment, and Durham gets no sales tax. All the while,
Duke takes an 18 percent slice for itself, and the
card can't be used off-campus. Thanks Duke! Way to
help the community! 

Duke gets these tax breaks because it's a
"non-profit," but this looks a whole lot like
"for-profit" behavior. I just don't see other
non-profits engaging in such elaborate schemes to
avoid paying sales tax. 

By opening up the DukeCard system to all local
merchants, Duke could avoid this appearance of
impropriety, and Durham would receive the sales tax
revenue. Those hefty commissions and start-up fees
would have to be lowered too, which could really hurt
DukeCard's profitability. Lucky for us, Duke is a
non-profit organization, and doesn't care about such
things. 

Chris Sevick 
Durham