Committee hears AB535 to align Nevada sales‑tax exemptions with IRS 501(c)(3) status

Assembly Bill 535 would revise Nevada's eligibility rules for sales and use tax exemptions for organizations created for religious, charitable or educational purposes by clarifying that recognition as tax‑exempt under Internal Revenue Code section 501(c)(3) is sufficient to qualify under state statute.

Sponsor Shay Backus and Miles Dixon (Nevada Grant Lab) described the bill as a streamlining measure to reduce inconsistent administration and paperwork burdens that currently face nonprofit organizations seeking the exemption. The bill would amend NRS sections referenced in the transcript (sections cited as 372.3261 and 374.3306 by the presenter) to add clarifying language and a standardized definition tied to federal 501(c)(3) recognition.

Nonprofit and business groups testified in support, including the Latin Chamber of Commerce, Nevada Taxpayers Association, Asian Community Development Council, Vegas Chamber, United Way of Southern Nevada, Southern Nevada Sports Hall of Fame and multiple bookkeeping and nonprofit service providers, who said the current process is burdensome, inconsistently applied and that aligning with IRS designations would free resources for program delivery. No opposition callers registered; the Department of Taxation said it is neutral and noted the department could implement the change but requested a later effective date (October or January) to allow time to adjust systems. The committee heard the testimony and closed the hearing; no committee vote was taken that day.