Madison's new thrift store, now christened the Encore Family Store, is scheduled to open in November. Store organizers have scheduled donation drives to collect merchandise for the store for Aug. 16, Sept. 6 and Sept. 13 from 9 a.m. to noon. On those days, folks can bring the usable contents of their basements and rummage sale leftovers to the empty lot between Lewis and Montgomery's on South Washington.
The thrift store organizers continue to seek financial donations. A fundraising letter sent around town on July 25 says that the project as reached two thirds of its fundraising goal. Last March, organizers reported that the thrift store had raised $400,000 of the projected $650,000 it needed; that was 62%. Climbing from 62% to 67% (assuming the July 25 letter isn't rounding) in four months isn't exactly a torrid fundraising pace.
Inter-Lakes Community Action Partnership will run the thrift store, as it runs similar operations in Howard, Flandreau, and Clark, to generate revenue for its various community service programs, like 60s Plus Dining and rent and utility assistance.
ICAP will need some rent assistance of its own. A flyer distributed with the July 25 letter indicates that the thrift store's operating expenses will include rent. Recall that the landlord, the Madison Community Foundation, acquired the property for free, meaning they have no mortgage to pay off. I suppose someone has to pay the property tax on the lot, and I suppose it doesn't hurt to have one non-profit pay another non-profit to pay the city and county and school district, but I can't imagine the Madison Community Foundation will charge ICAP much more than that.
The thrift store promoters continue to press the fear of federal budget cuts as a reason to support the thrift store and "lessen ICAP's dependence on governmental support." Since that fear of federal budget cuts is generated mostly by the government-crashing politics of Kristi Noem, Mike Rounds, and the GOP, I assume this fear will also motivate everyone supporting the thrift store to vote for Rick Weiland and Corinna Robinson this fall.
In a discussion here in early July, local reader DB, responding sarcastically to comments questioning Madison's commitment to desirable economic development, contended that the thrift store can meet a currently unfilled role in boosting the local economy by recycling otherwise economically valueless goods locally:
Yeah, we have no need for a thrift store. Don't mind the Goodwill Truck shipping thousands of dollars of items out of the city every quarter(it will be in town in the next week), not to mention the overflowing bins located on main, near Nicky's, and near El Vaquero. Let's just keep letting that slip away while someone will fully fund a venture by taking worthless taxpayer assets and turning it into something good. It's a need that can't be filled by one of the many consignment shops in town [DB, comment, Madville Times, 2014.07.09].
I have mixed feelings about that comment. On the one hand, I appreciate the notion of increased recycling and local self-sufficiency. But don't we already meet that need with rummage sales? And should we really let ourselves get into the mindset of thinking of donations to Goodwill and other state and national non-profits as losses to our community? If we must think in economic bottom-line terms, we could argue that the system of rummage sales and current donation exports is more efficient for the local economy. At rummage sales, the owners set up a few tables in their garages and yards for a day or two. The free market quickly sorts the usable treasures from the junk no one wants. The owners strike their tables, leaving no sale infrastructure or overhead. They dump the remaining items in the donation bins, which are emptied by out-of-town interests, leaving Madison with no lingering useless inventory—and remember, from a strict economic perspective, static inventory is a cost.
The thrift store will shift that inventory from basements and closets to a new downtown store. It will shift some of the economic benefit from individual rummage sale profits to a few ongoing salaries and support for charity. But the thrift store will establish new ongoing overhead, and it will reduce the economic benefit of outside agencies removing our junk at no local cost.
Of course, these costs and benefits are all pretty marginal. Remember, Madison is spending $650,000 to turn an empty lot into a secondhand store, a venue with slightly more draw but the same basic mission as the city recycling station on Southwest 7th.
Send your cash contributions for the Encore Family Store to the Madison Community Foundation, 820 N. Washington Ave., Madison, SD 57042
I forgot to change my username on some computers so that is why it is listed as DB. I stand by my comments as I feel this is a great addition to the services we can provide for low income residents at very little expense to taxpayers. I don't feel the rummage sales cut it due to our 9 months of cold weather. I also don't consider all the donations as junk. I have boxes of clothing and goods ready to go, most of them name brand that consignment shops would love to have. (I'm not the best at laundry so I tend to shrink items on accident) I would rather they go to the less fortunate at prices they can afford. I've been the kid who had the hand me down items growing up, looking at others with their new air jordans and fancy mesh shorts. Now, that I am able to give back, I'd like to see a kid have that good sense of ownership by sporting a few nicer items without setting his parents back a few month's worth of spare cash. Not only will this place help with clothing, but it will also help with furniture and other household items. I have heard that local businesses have offered to donate certain appliances, furniture such as tables and couches, that would normally get sent to Sioux Falls charity that can now be used by families in our area. The next time a well off individual replaces his fairly new furniture in his lake cabin, he can offer those removed items to local families for next to nothing. I am also donating a website to the thrift store on behalf of myself and my employees. Their success will only benefit the programs they support for low income families.
Cory, good news - your supposition that "I suppose someone has to pay the property tax on the lot . . ." could be incorrect.
SDCL 10-4-9.1 exempts from property taxes property owned by a public charity that is used for charitable purposes. "A public charity" is defined as "any organization or society which devotes its resources to the relief of the poor, distressed, or underprivileged." There are some additional qualifications, including 501(c)(3) status, but it seems the thrift store may well qualify as you have described it.
Really? Interesting. Does the Madison Community Foundation, which will own the property and lease it to ICAP, count as such a "public charity"? Last I checked, MCF is a 501(c)3.
And if MCF doesn't have to pay property tax, why charge rent? If MCF does have to pay rent, why not give the property to ICAP, which might not have to pay property tax?
Before I go too far, BCB, is there a similar statute that would exempt the thrift store and its sale of secondhand goods from sales tax? My impression is that we pay sales tax at Goodwill and Salvation Army, don't we?
Cory, I know very little about the Madison Community Foundation, but if it is a qualified 501(c)(3), then there is a good chance it will qualify as a charity under the statute. Charging rent makes some sense, as the funds could be used to take care of repairs, upkeep and improvements to the property.
I think sales tax is a different matter, as any store, whether charitable of for profit, only "collects" the tax, it does not "pay" it. And customers who pay it probably don't qualify as charities.
Daniel, I'm curious--why don't you just take your donations to the clothing room at St. John Lutheran where they give away clothing to those in need? That ministry has been going strong for many years.
It's interesting that the Madison Community Foundation, after getting public donations in order to build the building, will then charge ICAP rent for the building, which will go to the Madison Community Foundation. Seems very circular to me.
Bearcreekbat, I'm of the impression that buyers don't have to pay sales tax on secondhand good. If I buy a used fishing rod at your rummage sale, you don't have to collect or remit sales tax. The thinking, I suppose, is that the fishing rod has already been taxed once. Am I mistaken in thinking there is such a secondhand rule? If there isn't such a rule, are folks who conduct rummages sales in violation of the sales tax law? If there is such a rule, why do thrift stores still collect sales tax?
Cory, I skimmed through SDCL ch 10-45, and did not notice any exemption for used items.
Presumably just as we are supposed pay sales tax on things we buy over the internet from out of state retailers by filing a "use tax form" that identifies the transaction and calculates the sales tax we are supposed to pay, those of us that who purchase items at rummage sales are probably technically supposed to file a use tax form to calculate and pay that sales tax, although I doubt anyone ever has. It reminds me a little of the old personal property tax forms we were supposed to fill out identifying all our personal property so the value could be taxed - it was called a "liar's tax" and most South Dakotan's barely owned anything of value according to the completed forms.
Anyway, there may be an exception that I did not notice, but if not, the "use tax form" is typically how sales taxes are supposed to be paid by a buyer when not collected by the seller. For tangible personal property it looks to me like SDCL 10-45-2 places the collection burden only on retail sellers and a rummage sale seller probably does not qualify as a retail seller.
The good news is that SDCL 10-45-18.6 provides a sales tax exemption for the sale of swine or cattle semen, so you can fill her up with no extra sales taxes!
I think in Sioux Falls, and probably all communities, someone can conduct up to four rummage sales per year, more than that, it becomes a "business," and a sales tax license is required.
There is someone who rents two garages in my neighborhood to store items, and conduct rummage sales from. That person conducts a sale four times per year during the spring and summer.
During winter, the person collects more items to sell in the spring.
What many artists who have a sales tax license, which is required to sell art work, do is to include the tax in the cost of the item. For example, instead of a customer paying $20.00 plus tax, the artist will charge $25.00. The artist will then, for the reporting period, pay the the amount of tax due.
It is conceivable then that if Cory purchased his fishing rod from someone who has rummage sales as a business (i.e., has a sales tax license,) the seller is rounding up the price of the item to include the sales tax. Although it may not seem like you are paying a sales tax, you are indirectly.
In Sioux Falls, thrift stores also serve as emoyment training for folks struggling with mental illness and cognitive delays. Additionally, most thrift stores give away a fair amount of items to individuals in need if they present with a voucher from other community partners (churches, ICAP worker, DSS, Community Based Mental Health Centers etc.)
[Proud, could you send me a functional e-mail, please?]