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Capping State Itemized Deductions Would Reduce Charitable Giving In North Carolina
North Carolina’s nonprofit sector is concerned that the $20,000 cap on itemized deductions in the Senate budget would harm communities across the state by reducing charitable giving.
North Carolinians gave $5.9 billion in charitable contributions in 2012, the most recent year for which federal income tax data is available.
Under current law, charitable nonprofitsin North Carolina pay sales and use tax on their purchases and can apply for semi-annual refunds of the taxes they pay. A system of sales tax exemption would save nonprofits time and reduce administrative burdens. S.497 would replace the nonprofit sales tax refund system with sales tax exemption for most 501(c)(3) nonprofits.
How does the current nonprofit sales tax refund system work?
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It protects taxpayers.
The North Carolina Center for Nonoprofits submitted comments (on February 20, 2014) on the potential impact of the proposed rulemaking on 501(c)(3) nonprofits in North Carolina in response to proposed guidance for tax-exempt social welfare organizations on political activities.