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Committee recommends do‑not‑pass on bill to exempt used clothing sales tax for nonprofits
Summary
The Senate Finance and Taxation Committee recommended a do‑not‑pass on House Bill 14‑28, which proposed exempting used clothing sold at nonprofit thrift stores from North Dakota sales tax, citing administration and fairness concerns.
The Senate Finance and Taxation Committee on Monday recommended a do‑not‑pass on House Bill 14‑28, which would exempt used clothing sold at nonprofit thrift stores from North Dakota’s sales tax.
Representative Steve Vetter, sponsor of the bill, told the committee the measure would end sales tax on used clothing sold by nonprofit thrift stores because the clothing has “already been taxed.” He said the exemption would help low‑income residents and seniors on fixed incomes by lowering the cost of a basic necessity.
Andrew Alexis Farvel, secretary of the Nonpartisan League, testified in support, saying the bill “is judicious” and would keep more clothing out of landfills.
Opposition testimony came from Bill Wilkin of the North Dakota League of Cities. Wilkin told the committee the state already has a long list of sales‑tax exemptions and said the proposal would reduce the tax base, cut revenue for state and local funds, and create “an uneven playing field” by giving nonprofit thrift stores an advantage over for‑profit used‑clothing merchants.
Shannon Fleisher of the North Dakota Tax Department testified in a neutral capacity and outlined administrative complications the department would face if the exemption were adopted. Fleisher said North Dakota’s sales‑tax law does not currently define “clothing,” and that questions would arise about what counts as used (for example, new items donated with tags, overstock donations from retailers and clothing donated from neighboring states with different tax rules). She also told the committee there are about 180 thrift stores in the state but the department does not have a breakdown of which are 501(c)(3) nonprofits.
Committee members raised the same concerns. Several senators said the bill would need clearer definitions (what constitutes “used” clothing and what items are included) and questioned whether the exemption would unfairly favor nonprofit thrift stores over similar for‑profit sellers. After debate, the committee voted to recommend do‑not‑pass. Senator Powers volunteered to carry the bill to the floor.
Votes at a glance
- Committee recommendation on HB 14‑28 (exempt used clothing at nonprofit thrift stores): do not pass 4–2 (Yes/do‑not‑pass: Vice Chair Romo; Senator Patton; Senator Powers; Senator Warren. No/oppose do‑not‑pass: Chairman Weber; Senator Marsali).
