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Bill would equalize sales‑tax treatment for nonprofit fundraisers in public and private venues
Summary
Senator Sean Cleary presented Senate Bill 23‑69 to remove a disparity that taxes some nonprofit fundraising revenue when events are held in publicly owned facilities. Make‑A‑Wish North Dakota and nonprofit advocates urged support; the tax department provided historical context about prior caps of $5,000 and $10,000.
Senate Bill 23‑69 would treat fundraising sales the same whether a nonprofit rents a private or a public venue so long as the nonprofit pays fair‑market rent. Sponsor Sean Cleary, R‑District 35, told the House Finance and Taxation Committee the current rule creates a perverse incentive against using public facilities that charge market rates.
"Public venues such as event centers and educational institutions often charge rental rates comparable to private venues," Cleary said. "Our current law creates a financial distinction between otherwise similar choices for no clear policy reason." He asked the committee to consider standardizing sales‑tax treatment so charitable funds raised at public venues are not taxed solely because of ownership.
Amanda Godfried, regional director for Make‑A‑Wish North Dakota, described using Bismarck State College for recent galas and paying market fees for space, catering and staffing. She said the group discovered tax liability when hosting events at the public venue and that the tax diverted donor dollars away from mission work.
"Because we chose a publicly owned space, we were suddenly subject to tax that is not imposed at private facilities," Godfried testified. "Dollars that should have gone directly toward granting wishes were instead redirected to state sales tax."
Sean McKenna of the North Dakota Association of Nonprofit Organizations said the disparity could push nonprofits to choose private venues over public ones and urged the committee to level the playing field. Shannon Fleisher of the Tax Department provided a brief legislative history: charitable activity in public facilities was fully taxable before 2001; a $5,000 exception appeared in 2001 and that cap was raised to $10,000 in 2011. Fleisher said she could not find a clear legislative record explaining the original policy rationale.
Committee members discussed whether the bill should alter the dollar threshold or clarify the fair‑market rent standard; sponsors said the bill aims to preserve the exemption only when nonprofits pay market rates for facility use. No formal committee vote was recorded during the hearing; the committee closed the hearing after support testimony.
The bill remains in committee for potential amendment and further consideration.
