Paducah City officials are staying mum on what they will do about BBQ on the River’s violation of a 2011 agreement in the wake of the festival organization ending Paducah Symphony Orchestra’s management of a beer garden.
BBQ on the River President Susie Coiner signed a contract for services with the city in March 2011 that stated the organization was waiting to obtain 501(c)3 status and wanted to start a downtown retail store, which is now BBQ & More. The city paid BBQ on the River $20,000 to establish the store but called for the organization to send a financial audit to the city.
City Information Officer Pam Spencer says that audit never came.
BBQ on the River also never obtained 501(c)3 status after that agreement. It was considered a 501(c)4 until the Internal Revenue Service revoked that status May 2012 because it had not filed proper paperwork for three years as seen here.
Both types of organizations are tax exempt but a 501(c)3 is a public charity or private foundation while a 501(c)4 is a civic group that operates exclusively for promotion of social welfare or as a local association of employees with limited membership.
City officials including Spencer and Finance Director John Perkins would not comment on what the city will do to keep BBQ on the River accountable after it violated the 2011 agreement. Mayor Gayle Kaler and City Manager Jeff Pederson could not be reached for comment.
While BBQ on the River was a 501(c)4 Darlene Mazzone, past President of what had formerly been known as Paducah Main Street, says the festival organization along with BBQ & More were allegedly using her group’s purchase exemption number to avoid sales tax charges.
Mazzone explains in a letter to the Kentucky Department of Revenue that The Columbia Club, which was a 501(c)3, was eligible for tax exemption but 501(c)4s like BBQ on the River were not. BBQ & More is a for-profit organization. More details about the retail store can be found here.
Mazzone discovered the misuse of the tax identification number when she received an invoice for BBQ on the River purchases in September 2012. She then sent the letter in early 2013 to the Department of Revenue, but did not hear from them for at least 5 months.
By the time the revenue department contacted Mazzone, her organization had dissolved, and the tax identification could no longer be used. So she told the department no further action was necessary.
BBQ on the River coordinator and BBQ & More co-owner Susie Coiner could not be reached for comment.
The festival organizers, the Paducah Symphony Orchestra and some city officials will meet to discuss the event’s beer garden March 4.
