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Senate committee passes bill to exempt donated goods from sales tax liabilities
Summary
Senate Bill 146 would exempt donated merchandise from state sales tax when retailers give goods to charities or nonprofits; sponsor said the change would remove a perverse penalty on donations and that the fiscal impact has declined over several sessions.
The Revenue & Tax Committee approved Senate Bill 146, a measure sponsored by Senator Clark to exempt donated goods from sales tax liability in circumstances where retailers or individuals donate merchandise to nonprofits, charities or volunteer organizations.
Senator Clark argued current practice can force donating retailers to pay sales tax on the value of goods they donate, creating a disincentive for charitable giving. "If I send it to the landfill, I pay nothing. If I send it to Habitat for Humanity, the state expects me to write a check for sales tax for the value," Clark said, calling that outcome "absurd." He said the bill would fix that discrepancy and noted prior fiscal estimates have fallen over time, making the proposal more affordable now.
There were no public opponents signed up. The committee approved the bill on a do‑pass motion (moved by Senator Johnson; second by Senator Bledsoe) by voice vote.
What happens next: SB 146 will go to the Senate floor for further consideration.
