North Carolina SB 62: Nonprofit Fundraising Sales Tax Exemption.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 62

Short Title: Nonprofit Fundraising Sales Tax Exemption. (Public)
Sponsors: Senator Burgin (Primary Sponsor).
Referred to: Rules and Operations of the Senate
February 10, 2025
*S62-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO PROVIDE A SALES TAX EXEMPTION FOR CERTAIN NONPROFIT 2
ENTITIES AND TO EXEMPT CERTAIN FUNDRAISING EVENTS BY NONPROFITS 3
FROM SALES TAX. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. G.S. 105-164.14(b) is repealed. 6
SECTION 2. G.S. 105-164.13 reads as rewritten: 7
"§ 105-164.13. Retail sales and use tax. 8
The sale at retail and the use, storage, or consumption in this State of the following tangible 9
personal property, digital property, and services are specifically exempted from the tax imposed 10
by this Article: 11
... 12
(52a) Tangible personal property, digital property, and services for use in carrying 13
on the work of the following entities, provided the entity is not owned or 14
controlled by the State: 15
a. Hospitals not operated for profit, including hospitals and medical 16
accommodations operated by an authority or other public hospital 17
described in Article 2 of Chapter 131E of the General Statutes. 18
b. An organization that is exempt from income tax under section 19
501(c)(3) of the Code and not classified in the National Taxonomy of 20
Exempt Entities major group areas of (i) Community Improvement 21
and Capacity Building, (ii) Public and Societal Benefit, or (iii) Mutual 22
and Membership Benefit. 23
c. Volunteer fire departments and volunteer emergency medical services 24
squads that are (i) exempt from income tax under the Code, (ii) 25
financially accountable to a city as defined in G.S. 160A-1, a county, 26
or a group of cities and counties, or (iii) both. 27
d. An organization that is a single member LLC that is disregarded for 28
income tax purposes and satisfies all of the following conditions: 29
1. The owner of the LLC is an organization that is exempt from 30
income tax under section 501(c)(3) of the Code. 31
2. The LLC is a nonprofit entity that would be eligible for an 32
exemption under section 501(c)(3) of the Code if it were not 33
disregarded for income tax purposes. 34
3. The LLC is not an organization that would be properly 35
classified in any of the major group areas of the National 36

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 62-First Edition
Taxonomy of Exempt Entities listed in sub-subdivision b. of 1
this subdivision. 2
e. Qualified retirement facilities whose property is excluded from 3
property tax under G.S. 105-278.6A. 4
f. A university-affiliated nonprofit organization that procures, designs, 5
constructs, or provides facilities to, or for use by, a constituent 6
institution of The University of North Carolina. For purposes of this 7
sub-subdivision, a nonprofit organization includes an entity exempt 8
from taxation as a disregarded entity of the nonprofit organization. 9
g. Over-the-counter drugs purchased for use in carrying out the work of 10
a hospital not listed in one of the sub-subdivisions of this subdivision. 11
The exemption provided in this subdivision includes indirect sales to a 12
nonprofit entity of digital property and tangible personal property purchased 13
by a real property contractor that becomes a part of or permanently installed 14
or applied to any building or structure that is owned or leased by the nonprofit 15
entity and is being erected, altered, or repaired for use by the nonprofit entity 16
for carrying on its nonprofit activities. A sale to fulfill a real property contract 17
with an entity that holds an exemption certificate is exempt to the same extent 18
as if purchased directly by the entity that holds the exemption certificate. A 19
real property contractor that purchases an item allowed an exemption under 20
this subdivision must provide (i) an exemption certificate to the retailer that 21
includes the name of the nonprofit entity holding the exemption certificate, 22
(ii) the exemption certificate number issued to that holder, and (iii) the 23
information required pursuant to G.S. 105-164.28. 24
The exemption provided in this subdivision does not apply to (i) purchases 25
of electricity, telecommunications service, ancillary service, piped natural gas, 26
video programming, a prepaid meal plan, aviation gasoline and jet fuel, and 27
spirituous liquor or (ii) sales and use tax liability indirectly paid by a nonprofit 28
entity through reimbursement to an authorized person of the entity for tax 29
incurred by the person on an item or transaction subject to tax under Article 5 30
of this Chapter. 31
The aggregate annual exemption amount allowed to an entity under this 32
subdivision for a fiscal year may not exceed thirty-one million seven hundred 33
thousand dollars ($31,700,000) in tax. A real property contractor who pays 34
local sales and use taxes on property qualifying for an exemption under th