With tax season upon us, booksellers should be aware of a change regarding the tax deductibility of their membership dues.
Dues paid to ABA are not tax deductible as charitable contributions for income tax purposes; however, ABA membership dues may be tax deductible as ordinary and necessary business expenses.
The deductibility of membership dues is subject to restrictions imposed as a result of association lobbying activities. Through ABA’s advocacy activities, as well as its financial support of such organizations as Media Coalition, ABA annually engages in lobbying activities.
In years past, ABA has notified members that a small percentage of dues has not been tax-deductible because of lobbying activities, but, on occasion, the level of deductibility does change. The non-deductible portion of member dues — i.e. the portion that is allocable to lobbying — was previously three percent.
For the 2016 tax year, the non-deductible portion of member dues will rise to 10 percent. This is not because ABA’s lobbying activity has significantly increased, but rather because of an evolving interpretation of IRS rules, which has led ABA to adjust its notice of deductibility. Members should expect the notice of deductibility to change again next year.