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The Lifehacker article definitely implies that stores are not counting your donation as their own donation. > it will not include your donation as part of its

by SamBam 4y ago

The Lifehacker article definitely implies that stores are not counting your donation as their own donation. > it will not include your donation as part of its business receipts, or income, nor will it claim the charitable gift as an expense. (And the order of operations is not so relevant. From a tax perspective, there's no difference if it forwards your donations and calls it their own, or makes its own donation and reimbursing itself with your donation. In both cases it doesn't lose any money and gets to illegally claim a tax deduction.) This particular case is about a legal obligation, not a tax credit, but in either case it's unethical and illegal to call customer's donations your own.

thaumasiotes 4y ago
> but in either case it's unethical and illegal to call customer's donations your own. What? That makes no sense. You put in the effort and delivered the money. Without your effort, the money would never arrive. In every possible sense, the customer's donations are donations from you. Politicians are always evaluated by how much fundraising they can do for their party. They are never evaluated by how much of their fundraising came out of their own pocket, because... that metric just isn't relevant to anyone or anything. Same goes for salesmen. If you're responsible for $10,000,000 / year of revenue, does it matter to anyone that you didn't personally purchase $10,000,000 / year of products? Of course not.
- SamBam 4y ago
  The grocery stores are getting the reflected credit for being involved in collecting the donations, of course, which is why the do it, but they absolutely do not get to have the legal credit for actually donating the money. This is absolutely cut-and-dry, and echoed in the Lifehacker article, and here [1] and here [2]. 1. https://apnews.com/article/fact-checking-000329849244 https://apnews.com/article/fact-checking-000329849244 2. https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-those-checkout-donations-0 https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-...
  - thaumasiotes 4y ago
    There are no tax implications either way. The benefit you're worrying about is imaginary. From your link #2: > What happens to the money you donate at the cash register? > This is where you round up your bill to give to a charity designated by the retailer, and the donation amount appears on your receipt. The store serves only as a collection agent for your gift. Assuming the business is following the law, it will not include your donation as part of its business receipts, or income, nor will it claim the charitable gift as an expense. In the alternative scenario, the store claims the charitable gift as an expense, and it also recognizes it as part of its business receipts. This is the difference between being taxed on [(I+G) - G] and being taxed on [(I)]. The fact that you get to subtract a G in the first formula means nothing. The store gets equivalent legal credit for donating the money in the other scenario when it is allowed to exclude that money from its business receipts. Or, from another perspective, the ability to claim a deduction in the one case is of zero benefit to the store, because they also get to claim the same deduction in the other case.
    - SamBam 4y ago
      I feel like you didn't read that well, or missed the original issue in OP's article. The Tax Policy article is describing two legal ways that a store can be involved in charities: 1. The business engages in a co-venture with a nonprofit charity. It dedicates a certain percentage of its sales to a charity. The company can deduct this gift in it's taxes. This cannot come out of a voluntary addition made by the customer at the POS. 2. A voluntary donation made by the customer at the POS. The business cannot count this for a deduction. The customer can deduct it (though generally won't). It makes no difference that, as you said earlier, the company "put in the effort and delivered the money." The donation is not their donation. These are two mutually-exclusive charity drives. You cannot move money from one pot to the other. The original article says that the petitioners are claiming that CVS had a legal obligation to do (1) i.e, they had engaged in a co-venture with the ADA and had pledged a certain amount of their own money, but that instead they were using money from (2), customer's voluntary contributions at the POS.
      - 4y ago

by SamBam 4y ago

thaumasiotes 4y ago

> but in either case it's unethical and illegal to call customer's donations your own. What? That makes no sense. You put in the effort and delivered the money. Without your effort, the money would never arrive. In every possible sense, the customer's donations are donations from you. Politicians are always evaluated by how much fundraising they can do for their party. They are never evaluated by how much of their fundraising came out of their own pocket, because... that metric just isn't relevant to anyone or anything. Same goes for salesmen. If you're responsible for $10,000,000 / year of revenue, does it matter to anyone that you didn't personally purchase $10,000,000 / year of products? Of course not.

SamBam 4y ago
The grocery stores are getting the reflected credit for being involved in collecting the donations, of course, which is why the do it, but they absolutely do not get to have the legal credit for actually donating the money. This is absolutely cut-and-dry, and echoed in the Lifehacker article, and here [1] and here [2]. 1. https://apnews.com/article/fact-checking-000329849244 https://apnews.com/article/fact-checking-000329849244 2. https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-those-checkout-donations-0 https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-...
- thaumasiotes 4y ago
  There are no tax implications either way. The benefit you're worrying about is imaginary. From your link #2: > What happens to the money you donate at the cash register? > This is where you round up your bill to give to a charity designated by the retailer, and the donation amount appears on your receipt. The store serves only as a collection agent for your gift. Assuming the business is following the law, it will not include your donation as part of its business receipts, or income, nor will it claim the charitable gift as an expense. In the alternative scenario, the store claims the charitable gift as an expense, and it also recognizes it as part of its business receipts. This is the difference between being taxed on [(I+G) - G] and being taxed on [(I)]. The fact that you get to subtract a G in the first formula means nothing. The store gets equivalent legal credit for donating the money in the other scenario when it is allowed to exclude that money from its business receipts. Or, from another perspective, the ability to claim a deduction in the one case is of zero benefit to the store, because they also get to claim the same deduction in the other case.
  - SamBam 4y ago
    I feel like you didn't read that well, or missed the original issue in OP's article. The Tax Policy article is describing two legal ways that a store can be involved in charities: 1. The business engages in a co-venture with a nonprofit charity. It dedicates a certain percentage of its sales to a charity. The company can deduct this gift in it's taxes. This cannot come out of a voluntary addition made by the customer at the POS. 2. A voluntary donation made by the customer at the POS. The business cannot count this for a deduction. The customer can deduct it (though generally won't). It makes no difference that, as you said earlier, the company "put in the effort and delivered the money." The donation is not their donation. These are two mutually-exclusive charity drives. You cannot move money from one pot to the other. The original article says that the petitioners are claiming that CVS had a legal obligation to do (1) i.e, they had engaged in a co-venture with the ADA and had pledged a certain amount of their own money, but that instead they were using money from (2), customer's voluntary contributions at the POS.
    - 4y ago