SALES TAX COLLECTIONS: EXEMPT
$5,000 IN NON-PROFIT SALES
House Bill 4112
Sponsor: Rep. Tony Stamas
Committee: Tax Policy
Complete to 3-17-99
A SUMMARY OF HOUSE BILL 4112 AS INTRODUCED 2-2-99
Generally speaking, a nonprofit organization with aggregate retail sales of less than $5,000 is not required to charge sales tax when making sales for fund-raising purposes. (This means a nonprofit with sales of $5,000 or more must collect sales tax on all of its sales.) House Bill 4112 would amend the General Sales Tax Act to remove that provision and specify instead that a nonprofit organization would not have to collect taxes on the first $5,000 derived from sales made for fund-raising purposes.
(The current provision applies to a school, hospital, church, parent cooperative pre-school, an organization with an exemption ruling letter from the Department of Treasury, or a nonprofit organization exempt from federal income tax under Section 501(c)(3) or Section 501(c)(4) of the Internal Revenue Code. A club, association, auxiliary, or other organization affiliated with one of those organizations would not be considered a separate person for the purposes of the exemption. The term "school" refers to each elementary, middle, junior high, or high school site within a local school district that represents a district attendance area as established by the local school board.)
Analyst: C. Couch
This analysis was prepared by nonpartisan House
staff for use by House members in their deliberations, and does not constitute an official
statement of legislative intent.