SB 397 — Nonprofit Fundraising Sales Tax Exemption.

FILED SENATE GENERAL ASSEMBLY OF NORTH CAROLINA MarSESSION 29, 2023 S.B.S 1 SENATE BILL 397 Short Title:

397 SESSION 2023 PRINCIPAL CLERK S D SENATE BILL DRS45190-MCf-118 Short Title:

Rules and Operations of the Senate March 30, 2023 A BILL TO BE ENTITLED AN ACT TO PROVIDE A SALES TAX EXEMPTION FOR CERTAIN NONPROFIT ENTITIES AND TO EXEMPT CERTAIN FUNDRAISING EVENTS BY NONPROFITS FROM SALES TAX.

The LLC is not an organization that would be properly classified in any of the major group areas of the National *DRS45190-MCf-118**S397-v-1* General Assembly Of North Carolina Session 2023 Taxonomy of Exempt Entities listed in sub-subdivision b.

The exemption provided in this subdivision includes indirect sales to a nonprofit entity of digital property and tangible personal property purchased by a real property contractor that becomes a part of or permanently installed or applied to anyanybuilding building or structure that is owned or leased bybythe the nonprofit entity and is being erected, altered, or repaired for use by the nonprofit entity for carrying on its nonprofit activities.

Theexemption providedinthis subdivisiondoes not applyapplyto to (i) purchases ofelectricity,telecommunicationsservice,ancillaryservice,pipednaturalgas,ofelectricity,telecommunicationsservice,ancillaryservice,pipednatural gas, video programming, a prepaid meal plan, aviation gasoline and jet fuel, and spirituous liquor or (ii) sales and use tax liabilityliabilityindirectly indirectly paid bybya a nonprofit entity through reimbursement to an authorized person of the entity for tax incurred by the person on an item or transaction subject to tax under Article 5 of this Chapter.

A real property contractor who pays local sales and use taxes on property qualifying for an exemption under this subdivision on behalf of an entity shall give the entity for whose project the propertypropertywas was purchased a signed statement containing (i) the date the property was purchased, (ii) the type of property purchased, (iii) the project for which the property was used, (iv) if the property was purchased in this State, the county in which it was purchased, and (v) if the property was not purchased in this State, the county in which the property was used.

The application for exemption must be in the form required bybythe the Secretary, be signed by a person with authority Page 2 DRS45190-MCf-118Senate Bill 397-First Edition General Assembly Of North Carolina Session 2023 to bind the entity, and contain any information required by the Secretary.

(b) Liability.–AnonprofitentitythatdoesnotusetheitemspurchasedwithitsexemptionLiability.– Anonprofitentitythatdoesnotusetheitemspurchasedwithitsexemption number must pay the tax that should have been paid on the items purchased, plus interest calculated from the date the tax would otherwise have been paid." SECTION 4.

ExceptasprovidedinthisExceptasprovidedinthissubsection,ataxingcountymaynotallowan subsection,ataxingcountymaynotallowanexemption,exclusion,exemption,exclusion, or refund that is not allowed under the State sales and use tax.

Misuse under this subdivision includes improper use of a certificate of exemption issuedto anonprofit entityentitypursuant pursuant to G.S.

DRS45190-MCf-118Senate Bill 397-First Edition Page 3 General Assembly Of North Carolina Session 2023 …." SECTION 7.

Page 4 DRS45190-MCf-118Senate Bill 397-First Edition