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Hearing on sales-tax exemption for used clothing draws support from thrift operators and opposition from League of Cities
Summary
House Bill 1428 would exempt sales of used clothing at thrift stores from state sales tax. Nonprofit thrift operators told the committee the exemption would benefit low-income shoppers; the North Dakota League of Cities opposed the bill citing lost sales-tax revenue for cities and an uneven playing field for merchants.
Representative Steve Vetter introduced House Bill 1428 to the House Finance and Taxation Committee, proposing a sales-tax exemption for sales of used clothing by thrift stores operated by nonprofit corporations. Vetter said the change would lower costs for low-income shoppers and seniors on fixed incomes and noted several other states have partial or full exemptions for clothing.
Joy Ankenbauer, board president of the Kenmare Closet thrift store, testified in support and said the nonprofit is mostly volunteer-run, donates a portion of proceeds to the community, and that clothing represents roughly 55% of its sales. Ankenbauer said many customers are economically vulnerable and that removing sales tax on used clothing would make items more affordable.
Bill Wilkin, appearing for the North Dakota League of Cities, testified in opposition and said the exemption reduces the sales-tax base, creating revenue loss for state, city and county budgets and an uneven competitive advantage for thrift stores that qualify. Wilkin pointed to a fiscal note attached to the bill and warned the exemption would shift pressure to other revenue sources.
Committee members asked how the exemption would affect local sales-tax shares; Wilkin confirmed the fiscal note indicates modest losses to cities and counties. Tax department staff were available for technical questions but did not offer a recommendation during the hearing. The committee closed the hearing with the bill under consideration and no immediate committee action recorded.
