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Committee approves amendment clarifying nonprofit event rental tax exemption in SB 2369
Summary
An amendment to Senate Bill 2369 clarifies when charitable/nonprofit event rentals are exempt from gross-receipts tax if the nonprofit pays fair-market rent and raises outreach questions about public facilities and competition.
A Senate committee adopted an amendment and advanced Senate Bill 2,369, which clarifies tax treatment for sales tied to educational, religious and charitable activities conducted by nonprofits. The amendment focuses on large event spaces and specifies that nonprofit entities will not pay tax on gross receipts from such activities provided they pay fair-market rent for the facilities they use.
Senator Rummel, who presented the amendment, said the change was intended to address uncertainty about which nonprofits are aware of the exemption and to avoid limiting competition with for-profit event centers. "As long as they are renting at fair market rent, then these activities are probably going to work out just fine," Rummel said.
Committee members asked practical questions about how fair-market rent would be determined and whether public institutions that publish rental rates could complicate competition. Senator Powers said she was concerned that public institutions can offer lower rates, potentially making private bridal or event venues less competitive. Senator Wallen responded that many public entities publish their rental schedules and that published rates would normally constitute fair market value for the purpose of the exemption.
The committee adopted the amendment, which restructured language and moved an exception into a clearer subsection; Senator Rummel moved adoption and Senator Wallen seconded. The committee then voted to recommend a due-pass report on SB 2369 as amended, with a roll-call vote showing unanimous support in the session excerpt. Senator Rummel volunteered to carry the bill to the floor.
Committee members also noted a typographical error in the fiscal note that referred to the bill as "HB 2369" instead of "SB 2369;" the committee recorded that as a minor error that did not affect the substance of the amendment.
