Although the organizations representing the two sides of the tax initiatives issue have been raising money for months, neither has complied with a law requiring that they register with the state before soliciting contributions.
Both Taxpayers For Utah and the Tax Limitation Coalition have ignored letters requesting they register with the state as charitable groups soliciting contributions, Division of Consumer Protection Director Dixie Minson said Friday.Failure to comply with the state charitable solicitations act is a class B misdemeanor, which carries a penalty of up to a $1,000 fine and six months in jail.
Although it is illegal for organizations not registered with the division to engage in fund raising, Minson said her policy is not to seek prosecution by the attorney general's office if they eventually comply with the law.
"These people are not the scam artists we usually go after," she said. "But if we allowed these two groups to get away with it, we'd be showing prejudice."
Tax Limitation Coalition Chairman Greg Beesley said his group does not need to register with the state because although donations are accepted they are not actively solicited.
The coalition was responsibile for getting three tax initiatives on the November ballot, which would limit property tax rates and government growth, roll back tax increases passed by the 1987 Legislature, and give parents of children in private schools a tax credit.
Representatives of Taxpayers For Utah said they had not received the letter, but they said that if the organization is required to register with the state it would be taken care of as soon as possible.
Taxpayers For Utah was formed earlier this year to fight the tax initiatives. Many influential individuals and groups have joined the organization, including two former governors who serve as co-chairman.
Form letters were mailed out to both organizations on Aug. 17 after a division investigator saw a Deseret News article about contributions made to Taxpayers For Utah, Minson said.
The letter gave the organizations 10 business days to respond. Since they didn't, Minson said a second letter is being prepared. If that letter is not answered, a registered letter will be sent.
If the organizations do not respond at that point, Minson said, an investigation will be launched, and information about their operations will be subpoenaed.
Minson said she hopes such extreme measures will not be necessary. She said that as long as the organizations contact her, each likely will be given a temporary solicitations permit so it can continue collecting money.
If the organizations believe they are exempt from the charitable solicitations act, Minson said, they still need to supply the division with information so an official determination can be made.
However, she said she believes neither organization qualifies under the law as exempt. Among the types of groups not required to comply with the law under specific circumstances are churches, youth organizations and PTAs.
Deputy Lt. Gov. Dave Hansen said the organizations are not covered by the law that requires political candidates and political action committees to regularly report their fund-raising activities to the state.
Hansen said Lt. Gov. Val Oveson has unsuccessfully proposed legislation that would require organizations advocating political issues to file the same types of expenditure statements.
Donations made to Taxpayers For Utah or to the Tax Limitation Coalition are not tax-deductible because neither organization has received tax-exempt status from the Internal Revenue Service.