INC NEWS - Seeking straight answers from Duke (three letters on DukeCard in Herald-Sun)

[John Schelp]

Letter: Much confusion over DukeCard taxation issue
Herald-Sun, 2 January 2006 

Michael Palmer, a representative of Duke University,
was kind enough to reply to my letter in The
Herald-Sun [Letters, Dec. 25, see below]. He said that
I was "misinformed" when I asserted that DukeCard
purchases were tax-exempt. OK. Let's check out my
information. An article in the Duke Chronicle of Oct.
28 reports that "students can only pay for purchases
with points if they are delivered on campus." 

Then, the Chronicle actually gets a Duke official to
provide the reason: "Director of Dining Services Jim
Wulforst explained that meal plan points are
non-taxable and thus can only be used on campus. He
added that Kemel Dawkins, vice president for campus
services, is currently in talks with lawyers about the
issue. Are these statements true or not? 

Whichever way you cut it, somebody at Duke
"misinformed" me. I'm not interested in affixing blame
to either of these individuals, but I think it
demonstrates how frustrating it can be to deal with
Duke's administration. It's time for some straight
answers. They have heard our concerns, and told us
that they'd get back to us with the details in a
month. It's now been well over two months. So, we're
all waiting for a comprehensive statement regarding
the DukeCard and sales tax. Once that's straightened
out, we can move on to the next DukeCard question: Why
is Duke skimming off 18 percent from each purchase,
when other universities are only charging 2-3 percent?


Chris Sevick 
Durham
 
****

Letter: DukeCard questioned
Herald-Sun, 12 December 2005 
 
After a poorly attended 9th Street block party Duke
sponsored during student orientation, the Old West
Durham Neighborhood Association received feedback from
merchants suggesting that DukeCard policies
contributed to the poor turnout. The DukeCard allows
students to use the card rather than cash for
purchases, but only for purchases on the Duke campus. 

We asked Duke officials if the system could be changed
to allow DukeCard use for off-campus purchases. We
also asked if Duke could reduce both start-up costs
for merchants (currently $1,200-$3,500) and its
commissions on purchases (currently around 18
percent), high costs that make program participation
prohibitive for many local businesses. 

President Richard Brodhead's initial response was
encouraging and Duke officials promised a timely
response. But the semester's end and the holiday
season are here, and we're still waiting. 

In the meantime, we learned that Indiana University
charges local merchants $300 in set-up costs and 3-5
percent in commissions. We also learned that UNC One
Cards can be linked to an area bank account and used
as check-cards at off-campus businesses -- a model
Duke should consider. 

The Duke Chronicle quoted Duke students saying they
seldom patronize off-campus businesses because they
prefer the convenience of making purchases with
DukeCards rather than cash. 

Duke officials have repeatedly said they support
business districts near campus. Expanding the DukeCard
program along the UNC One Card model would encourage
more students to venture off campus and patronize
Durham businesses. 

And cutting DukeCard set-up and commission costs would
be a way for Duke to put its money where its mouth is.


John Schelp; John Browner
Durham

Browner owns Books On Ninth; Schelp represents the
board of the Old West Durham Neighborhood Association.


****

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 [see above]. 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
 
****