The Ohio Supreme Court will decide whether an Ohio broadcaster can avoid paying taxes because their nonprofit organization runs a commercial radio station. As first reported by The Columbus Dispatch [link], the case involves WCVO 104.9 the River, a very successful Christian Contemporary Music (CCM) station in Columbus, Ohio.
At issue is whether the nonprofit organization is liable for thousands of dollars in real-estate taxes because it actually a “commercial enterprise.” Though the question is about Ohio tax law, it is of interest to public media folks because it is testing the line between commercial and noncommercial entities.
HERE ARE THE FACTS OF THE CASE
• WCVO 104.9 the River is licensed by the FCC to operate as a commercial station.
• According to the FCC, WCVO is owned by River Radio Ministries, a nonprofit corporation recognized as by as such by the IRS.
• WCVO is currently operated by One Connection Media Group, a 501c3 organization that took over in 2008 when the state of Ohio refused to give a property tax exemption to River Radio Ministries.
• Both One Connection… and River Radio Ministries are operated by the same people. WCVO’s license has not been transferred to One Connection…
• Ohio’s Tax Commissioner ruled WCVO’s property is used exclusively as a radio station and not for public worship. Ohio Assistant Attorney General Daniel Kim calls it a commercial enterprise, where the advertising funds the business.
• According to One Connection Media Group’s IRS Form 990 for the tax year 2013, WCVO received $3,720,000 for the sale commercials and $703,000 in donations -- $4,423,000 in total. Commercial ad sales constitute over 84% of the nonprofit organization’s revenue.
• Lawyers for WCVO argue “Christian radio is public worship” and on-air advertising is “no different than a traditional church selling advertising space in the weekly bulletin.”
The Ohio Supreme Court decision is expected in Spring 2016.
THE HOUSE THAT DAN BAUGHMAN BUILT
The man behind WOCV, One Connection Media Group and River Radio Ministries is Dan Baughman. According to the IRS 990, Baughman is well paid for his work. He took home $170,000 in 2013. WCVO’s national sales manager made almost $250,000.
So, is Christian radio is public worship? I don’t think so. It's time to pay your taxes, Dan.