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Bay State Banner gets its loan
By adamg on Thu, 07/23/2009 - 6:55pm
Bruce Mohl reports the BRA-controlled Boston Local Development Corp. agreed today to give Banner owner Mel Miller a $200,000, two-year loan - at 9% interest. Mohl provides some details of Banner finances and dishes how Tom Menino agreed to give the Banner a loan without ever actually consulting anybody on the non-profit corporation's board.
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Comments
the real shocker in there...
That would be the $900,000 loan to the Children's Museum at 1% interest. *falls off chair*
Unless they're paying that all back within three years (whoa, hefty monthly payments!) that's below AFR. Which would mean that the city would actually have to pay gift taxes on the interest they didn't collect.
Am I missing something? Not an accountant, here.
er, excuse me...
When I said "the city," of course I meant "the shadowy multimillion-dollar private nonprofit slush fund the mayor apparently holds the purse strings to." Naturally.
government agencies don't pay taxes
One level of government can't tax another - that's why muni bonds are tax free (there are exceptions - e.g. - bonds for things like dorms and hospitals and utilities that generate revenues and profits). fees between gov't levels are OK - but the distinction gets murky - something about an actual service having to be delivered.
strike that
made the same mistake as you. Not a government agency. Shadowy non-profits probably have some restrictions on interest that has to be charged - but I'm guessing you would need a specialist in the area - your run of the mill CPA probably can't answer that. Laws governing "the shadowy multimillion-dollar private nonprofit slush fund the mayor apparently holds the purse strings to" are especially complex.