Thread: Haunted House rules, regulations, permits, tax status? Help!?

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For the last 3 years I have had a Haunted House at my residence. We have never charged. The last 2 years I had both a monetary donation booth and a canned-food booth for a local food bank. I don't want to "charge" an admission fee, but at this point I have no choice (besides the obvious one.... Not doing the Haunt).

Here is my question. I realize that a lot has to do with the state and city that I reside, but as a general rule of thumb.... Next year I want to charge $5 per person. 8 years and under would be free. If they bring a canned food donation = $1 off. All monies collected OVER what I paid (2008 I spent $3000, 2009 I spent $2000) would be donated to the food bank. (Figures were only for illustration of how much I have paid previously. All totals "reset" the next year. So I'm not going to "collect" for previous years. That wouldn't be fair.)

Do I need to apply for a business license and tax exempt status?!? Am I really a non profit organization?

ALSO...... Do I need to have insurance? I have standard homeowners insurance. I post a sign at the front of the haunt that clearly states Enter at Your own Risk (we mean this).

Each year this gets bigger. Last year we had 340 people go through, $126 donated, and 202 POUNDS of food. We only ran 1 day. I want to run 3 days next year. I just fear being "shut down".

I don't want to break any laws. I don't want to get shut down. I just want to help the community, make lasting memories for the actors and guests, and see how far I can push myself to create new and awesome ideas, and HAVE FUN FOR ALL. Does it have to be political?!??!

Thanks in advance!!

-Troy
www.HalloweenHellmouth.com

I know here in Pa if you team up with a charity ( has a tax exempt number) and label it as a fundraiser you don't have to do any of that. in fact thats what i have done in the past. Look into your local LAOH or even better ask if the food bank would be willing to sponsor your haunt. If they do you can/might be able to use there tax id number to get the things you need TAX FREE.

I hope this makes sense.

I think charging an entrance fee changes the rules....

Definitely sit down with your insurance agent and tell him/her specifically what it is you plan on doing. Fines from the city is one thing to deal with, but if something goes wrong and your insurance doesn't cover it, you are hosed.

I called my insurance agent about my haunt when I decided to incorporate the backyard and garage, and he said everything was cool....but your situation is different

Originally Posted by Hellmouth

For the last 3 years I have had a Haunted House at my residence. We have never charged. The last 2 years I had both a monetary donation booth and a canned-food booth for a local food bank. I don't want to "charge" an admission fee, but at this point I have no choice (besides the obvious one.... Not doing the Haunt).

Here is my question. I realize that a lot has to do with the state and city that I reside, but as a general rule of thumb.... Next year I want to charge $5 per person. 8 years and under would be free. If they bring a canned food donation = $1 off. All monies collected OVER what I paid (2008 I spent $3000, 2009 I spent $2000) would be donated to the food bank. (Figures were only for illustration of how much I have paid previously. All totals "reset" the next year. So I'm not going to "collect" for previous years. That wouldn't be fair.)

Do I need to apply for a business license and tax exempt status?!? Am I really a non profit organization?

Probably, yes, and yes. I would have to here, don't know about your local laws, but I'm guessing you'll need the business license...which opens a whole can of worms...

ALSO...... Do I need to have insurance? I have standard homeowners insurance. I post a sign at the front of the haunt that clearly states Enter at Your own Risk (we mean this).

You'll have to ask your insurance, but I'm guessing you'll need event insurance.

This is a part of the reason I backtracked from professional to home haunting. Too much hassle (and money) to get all the CRAP to be professional around here. So, I donated all my old stuff to a professional haunt, and started over some 6 years ago.

Not to mention you'll have to deal with the fire marshal too & your haunt materials may not be up to code.

It may be a little late for charging a fee for it this year, but I'd get started now on next year.

Charging a mandatory fee puts you into the commercial category. That invites the local zoning guy to send you a "cease and desist" letter with the threat of huge fines if you don't stop running a business at your house. That invites the fire marshall and the local building inspector to come take a look for safety concerns. If you incorporate as a non-profit, you're still going to have to deal with the fact that you're running a commercial enterprise at your house. If you ask for a non-profit to sponsor the haunt, and they charge a fee, you're still running a commerical enterprise at your house. If you have someone injured on your property, and they paid a mandatory fee to go through the haunt (to anyone), your insurance company is not going to cover it.

You get away with a lot by NOT requiring a mandatory fee, by not collecting money to reimburse yourself for the cost of putting up the haunt, and not having any resemblance to a commercial enterprise.

If the cost of the haunt is too much for you to personally bear, you should find ways to make it cheaper to run. Making it a commercial enterprise, even a non-profit, is going to greatly increase your costs.

Craig

Originally Posted by CraigInPA

Charging a mandatory fee puts you into the commercial category. That invites the local zoning guy to send you a "cease and desist" letter with the threat of huge fines if you don't stop running a business at your house. That invites the fire marshall and the local building inspector to come take a look for safety concerns. If you incorporate as a non-profit, you're still going to have to deal with the fact that you're running a commercial enterprise at your house. If you ask for a non-profit to sponsor the haunt, and they charge a fee, you're still running a commerical enterprise at your house. If you have someone injured on your property, and they paid a mandatory fee to go through the haunt (to anyone), your insurance company is not going to cover it.

You get away with a lot by NOT requiring a mandatory fee, by not collecting money to reimburse yourself for the cost of putting up the haunt, and not having any resemblance to a commercial enterprise.

If the cost of the haunt is too much for you to personally bear, you should find ways to make it cheaper to run. Making it a commercial enterprise, even a non-profit, is going to greatly increase your costs.

Craig

Yes I would definitely agree with Craig, once you step over the line, it becomes a headache, but if this is what you love to do and want to take it to a new level, then go for it......

CraigInPA....You seem to know a bit about all this....I haven't incorporated with anyone but I want to take donations and give 100% of the proceeds to the Humane Society this year....I was simply going to put the donations into my personal bank account and write them a check from myself for that amount...That would keep everything private and not commercial on every level right?.....Is there something I should know about doing it this way? I don't have a huge turn out so I'm not too concerned at this point but thought I'd ask....Thanks....ZR

Originally Posted by ZombieRaider

CraigInPA....You seem to know a bit about all this....I haven't incorporated with anyone but I want to take donations and give 100% of the proceeds to the Humane Society this year....I was simply going to put the donations into my personal bank account and write them a check from myself for that amount...That would keep everything private and not commercial on every level right?.....Is there something I should know about doing it this way? I don't have a huge turn out so I'm not too concerned at this point but thought I'd ask....Thanks....ZR

Generally, a donation made without it being required to be a certain minimum or fixed cost is going to keep you out of the "commercial" category. Keeping the donation truly voluntary and telling the donors who it is going to is the key here.

Your accountant will probably tell you that you may have trouble writing off your donation (which is really the donation of others) to the Humane Society, even if your cost to obtain that donation is greater than the donation itself. He may also have an issue with you depositing cash and then writing a check, since it creates problems should the IRS audit you (like "where did this money come from? How do we know you deposited all of it?"). If you're talking more than a small amount of money, it's probably best to take the charity the actual cash, or have the charity send someone to man the donation table at your haunt. If it's a small amount of money, I personally wouldn't worry about it and do whatever is convenient for me...

Craig

Thank you so much for everyones input! I guess if I stay donation-only, I won't have to worry about all of that hoopla...

Seems if I ended up charging, the money would just cover all the things that I would need to do to make it legit, and I'd be back at square one...

Here's a thought, though. Please give me more input. For the professional HH's around here, there is a "Pass" that you can purchase that works at several different HH's that allows you to "jump" to the front of the line.

Would it still be commercial if I were to state, "A donation of $5 will move you to the front of the line?" The attraction would still be free overall. Just a thought. On second hand, I also don't want to p*ss off anyone that is waiting in line... But on third hand (lol), Free is free. If you have to wait, you wait...

I'm not money hungry... My "sob story" is a recent divorce, which has forced me not to be able to afford things this year. (Nor pay off the last 2 years) Just trying to think of anything I can so that it's not as big of a "hit" to the pocketbook. Dang politics....

However, last year I did create a reader board "Sponsored In Part By..." and was able to achieve $100 from Precision Tune Auto Care and $150 from the local Wal-Mart. Maybe I should concentrate on this?