Business association no longer nonpro?t

An organization designed to promote Carrboro business was forced to change its tax status after receiving notice from the federal government.

Formerly a nonprofit, the Carrboro Merchants Association filed to become a for-profit corporation in December after IRS notification that the group didn’t qualify as charitable. The change was made official Wednesday.

The association originally applied for nonprofit status in January 2009 after receiving faulty business advice, said its co-President Tyler Huntington.

“I completely agree with the IRS. We are not a charitable organization,” Huntington said. “Our goal is to promote tourism. Charitable work is helping poor people.”

As a for-profit corporation, the association will pay taxes on its income.

The organization is looking into other filing options, such as a nonprofit 501 ©(6) — a type of tax-exempt corporation for organizations with a public purpose, like business leagues.

“We’re just trying to make sure we’re not going to waste a lot of our members’ dollars on tax purposes,” Huntington said. “Whatever dollars we get in, we use throughout the year.”

Jesse Kalisher, owner of the Jesse Kalisher Gallery in Carrboro and former association president, created the organization to support Carrboro merchants.

“Our mission is very simple,” Huntington said. “To promote Carrboro as a town, as a destination place and to promote Carrboro businesses.”

The association distributes a free Walk Carrboro map, which points out local businesses to visitors and residents, and runs a website, Kalisher said.

The organization initially declared a nonprofit status so it could receive member dues without being taxed for them, Kalisher said. Dues are used to purchase maps, advertise member businesses and host the website.

The merchant’s association often works in conjunction with the Chapel Hill-Carrboro Chamber of Commerce on specific projects, but the two organizations have different overall purposes, Huntington said.

About 80 Carrboro-based businesses are members of the chamber, said its president and CEO Aaron Nelson. Many businesses are members of both corporations.

The newly for-profit association will have 100 shares of stock that the organization will own, though the association will never seek to make a profit, Kalisher said.

“Technically it’s split up among the members, but there’s no physical distribution of it,” he said. “Stock is just a legal formality.”

Contact the City Editor at city@dailytarheel.com.