SB 860 — Nonprofit Fundraising Sales Tax Exemption.

FILED SENATE GENERAL ASSEMBLY OF NORTH CAROLINA AprSESSION 28,2025 2026S S.B.1 SENATE BILL 860 Short Title:

860 SESSION 2025 PRINCIPAL CLERK S D SENATE BILL DRS45487-NIf-174B Short Title:

Rules and Operations of the Senate April 29, 2026 A BILL TO BE ENTITLED AN ACT TO PROVIDE A SALES TAX EXEMPTION FOR CERTAIN NONPROFIT ENTITIES, TOEXEMPTCERTAINTOEXEMPT FUNDRAISINGEVENTSCERTAIN BYNONPROFITSFUNDRAISING EVENTS BY NONPROFITS FROM SALES TAX, TO EXEMPT DIAPERS FROM SALES TAX, AND TO MODIFY THE OWNERSHIP REQUIREMENTS OF REAL AND PERSONAL PROPERTY USED FOR CHARITABLE PURPOSES.

*DRS45487-NIf-174B**S860-v-1* General Assembly Of North Carolina Session 2025 d.

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.

If the property was Page 2 DRS45487-NIf-174BSenate Bill 860-First Edition General Assembly Of North Carolina Session 2025 purchased in this State, the real property contractor shall attach a copy of the sales or purchase receipt to the statement.

The application for exemption must be in the form required bybythe the Secretary, be signed by a person with authority 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,ataxingcountymaynotallowanexemption,exclusion, subsection,ataxingcountymaynotallowanexemption,exclusion, or refund that is not allowed under the State sales and use tax.

105-164.29C for direct and indirect purchases bybythe theentityor entity or another person.

An affidavit of capital improvement DRS45487-NIf-174BSenate Bill 860-First Edition Page 3 General Assembly Of North Carolina Session 2025 substantiates that a contract, or a portion of work to be performed to fulfill a contract, is to be taxed for sales and use tax purposes as a real property contract." SECTION 6.

– A charitable purpose within the meaning of this section is one that has humaneandphilanthropicobjectives;itisanactivitythatbenefitshumanityhumaneandphilanthropicobjectives;itisanactivitythatbenefitshumanityorasignificant orasignificant rather than limited segment of the community without expectation of pecuniary profit or reward.

(e) HousingHousingExceptions. Exceptions.

– Real propertyheld byan organization describedindescribed in subdivision (a)(8) for a charitable purpose under this section qualifies for the benefit provided by this section if one of the following is true:

(1) It is held as a future site for housing for individuals or families with low or moderate incomesincomesincomes. incomes.

Real propertypropertymaybe mayclassified beunderthis classifiedunderthis section subdivision for no more than 10 years.

The taxes shall be carried Page 4 DRS45487-NIf-174BSenate Bill 860-First Edition General Assembly Of North Carolina Session 2025 forward in the records of the taxing unit as deferred taxes.

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