AB 535 — Revises provisions relating to the sales tax exemption for organizations created for religious, charitable or educational purposes. (BDR 32-812)

(ReprintedAssembly withBill amendmentsNo. adopted on April 21, 2025) FIRST REPRINT A.B.

535535–Committee ASSEMBLYon BILLRevenue NOCHAPTER.......... .

535–COMMITTEE ON REVENUE M ARCH 24, 2025 ____________ Referred to Committee on Revenue SUMMARY—Revises provisions relating to the sales tax exemption for organizations created for religious, charitable or educational purposes.

(BDR 32-812) FISCAL NOTE:

Effect on Local Government:

No.

Effect on the State:

Yes.

~ EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

Existing law imposes upon each retailer a sales tax measured by the gross receipts of the retailer from the retail sale of tangible personal property in this State, and requires the retailer to collect the sales tax from the purchaser in a transactionate,transaction to which the sales tax applies.

(NRS 372.105, 372.110, 374.110, 374.111, 374.115) Existing law also imposes a use tax on the storage, use or other consumption in this State of tangible personal property purchased outside of this State from a retailer in aoccurred transactionwithin that would have been subject to the sales tax in this StateState. if it had occExisting law exempts from such taxes the gross receipts from the sale of any tangible personal property sold by or to a nonprofit organization created for religious, charitable or educational purposes.

(NRS 372.185, 374.190, 374.191) in this State if it had Existing law exempts from such taxes the gross receipts from the sale of any tangible personal property sold by or to a nonprofit organization created for religious, charitable or educational purposes.

Department(NRS of372.3261, Taxation374.3306) andSections the1 Nevadaand Tax2 Commissionof tothis usebill toestablish determineacriteria for the whether an organization satisfies thatthe requirement,requirements to be exempt from sales and use taxes as a charitable organization, including, without limitation, by the organization establishing that it:

or (2) furthers - *AB535_R1* – 2 – at least one of certain specified purposes.

(1) provide to an organization that does not qualify for the exemption as a reasons why the organization does not qualify and the procedure to appeal such aahe determination;

and (2) submit to thetthe Legislature every odd-numbered year a report concerning applications for the tax exemption.

EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

For the purposes of NRS 372.326 [,] and 372.348, an organization is created for religious, charitable or educational- 83rd Session (2025) – 2 – section.nal purposes if it complies with the provisions of this section.2.

2.

(b) The sole or primary purpose of the organization , consideringconside(1) Advance a public purpose, donate or render gratuitously or at a reduced rate a substantial portion of its services to the factorspersons setwho forthare inthe subsectionsubjects 5,of isits to:charitable services, and benefit a substantial and indefinite class of persons who are the legitimate subjects of charity;

(1) Advance a public purpose, donate or render gratuitously or at a reduced rate a substantial portion of its services to the persons who are the subjects of its charitable services, and benefit a substantial and indefinite class of persons who are the legitimate subjects of charity;

- *AB535_R1* – 3 – (a) It complies with the requirements set forth in subsection [5;] 6;

(1)(2) Provide athletic,displays cultural or socialperformances activitiesof forthe visual oror children;

(2) Provide displays or performances of the visual or performing arts to members of the general public;

(4) Operate a school, college or university located in this State that conducts regular classes and provides courses of study required for accreditation or licensing by the State Board of Education or the Commission on Postsecondary Education, or for - 83rd Session (2025) – 3 – membership in the Northwest Association of Schools and of Colleges and Universities;

or (6) Sponsor programs of apprenticeship in this State through a trust created pursuant to 29 U.S.C.

§ 186.186.p in this State through 5.

5.In determining whether, for the purposes of subsection 3, an organization is created for charitable purposes, the Department and Nevada Tax Commission shall consider, without limitation, whether the organization:

In determining whether, for the purposes of subsection 3, an organization is created for religious, charitable or educational purposes, the Department and Commission shall consider whether the organization:

(f) HelpsSupports lessenefforts neighborhoodto tensions;eliminate prejudice and discrimination;

(g) SupportsAids effortsin todefending eliminatehuman prejudice and discrimination;civil rights secured by law;

or (h) AidsCombats incommunity defendingdeterioration human and civiljuvenile rightsdelinquency. secured by law;

or (i) Combats community deterioration and juvenile delinquency.

(a) No part of the net earnings of any such organization inures to the benefit of a private shareholder, individual or entity;

inures to (b) The business of the organization is not conducted for profit;

- *AB535_R1* – 4 – (c) No substantial part of the business of the organization is devoted to the advocacy of any political principle or the defeat or passage of any state or federal legislation;

Any nonprofit organization created for religious, charitable or educational purposes that wishes to claim an exemption- pursuant83rd toSession NRS(2025) 372.326,– must4 file– an application with the Department to obtain a letter of exemption.

If the Department determines that the organization is not created for religious, charitable or educational purposes, or otherwise does not meet the requirements to receive the exemption, the Department shall provide the organization with a fullfullxemption, explanation outlining the reasons why the organization does not qualify for the exemption and the procedure to appeal the determination.