New tax exemption rules proposed for nonprofit sales by Ohio legislators

House Bill 120, introduced in the Ohio Legislature on February 24, 2025, aims to amend existing tax regulations concerning casual sales and nonprofit organizations. The bill seeks to clarify the tax-exempt status of certain sales conducted by churches and nonprofit organizations, specifically limiting the number of days these entities can engage in tax-exempt sales to six days per calendar year. If this threshold is exceeded, the organization would be considered engaged in business and subject to sales tax for subsequent transactions.

Key provisions of the bill include exemptions for casual sales conducted by individuals or auctioneers, with specific exclusions for motor vehicles, watercraft, and other titled items. Additionally, the bill allows for broader participation in tax-exempt sales by student organizations, such as clubs and parent-teacher associations, without the six-day limitation.

The introduction of House Bill 120 has sparked notable debate among lawmakers and community stakeholders. Proponents argue that the bill supports charitable organizations by allowing them to raise funds without the burden of taxation, thereby enhancing their ability to serve the community. Critics, however, express concerns that the bill may lead to potential abuse of the tax-exempt status by organizations that exceed the designated sales days, undermining the tax base.

The implications of House Bill 120 extend beyond tax policy, touching on economic and social dimensions. By facilitating fundraising efforts for nonprofits, the bill could bolster community services and support local initiatives. However, the potential for increased scrutiny and regulation of nonprofit sales practices may also arise, prompting discussions about accountability and transparency in fundraising.

As the bill progresses through the legislative process, its future remains uncertain. Stakeholders are closely monitoring developments, with potential amendments and further debates anticipated in upcoming sessions. The outcome of House Bill 120 could significantly impact how nonprofit organizations operate within Ohio, shaping the landscape of charitable fundraising in the state.