A NC Senate bill (S.440) would exempt nonprofits from collecting and remitting sales tax on the ticket price or admission fees from most fundraising events. Under current state law, nonprofits and businesses are required to charge state sales tax on the ticket price or admission fees to entertainment and live events, then pass along the taxes they collect to the NC Department of Revenue. Because this law does not specifically address nonprofit fundraising events, many nonprofits are confused about whether they need to charge sales tax on tickets to these events – or at least the portion of ticket prices that is not tax-deductible as a charitable contribution. Adding sales tax to ticket fees often creates administrative burdens for nonprofits and reduces the amount of revenue from events that goes to nonprofits’ missions.
To help nonprofits avoid confusion and keep more of the proceeds from their fundraising events, the Center is asking legislators to fix the law to clarify that nonprofits don’t need to charge sales tax on tickets to fundraising events.