Senate Bill No. 353–Senator Rawson

 

March 17, 2003

____________

 

Referred to Committee on Taxation

 

SUMMARY—Clarifies requirements for determining whether charitable organization qualifies for exemption from taxes on retail sales. (BDR 32‑593)

 

FISCAL NOTE:  Effect on Local Government: Yes.

                           Effect on the State: Yes.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to taxes on retail sales; clarifying the requirements for determining whether a charitable organization qualifies for an exemption from such taxes; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. NRS 372.3261 is hereby amended to read as

1-2  follows:

1-3  372.3261  1.  For the purposes of NRS 372.326, an

1-4  organization is created for religious, charitable or educational

1-5  purposes if it complies with the provisions of this section.

1-6  2.  An organization is created for religious purposes if:

1-7  (a) It complies with the requirements set forth in subsection 5;

1-8  and

1-9  (b) The sole or primary purpose of the organization is the

1-10  operation of a church, synagogue or other place of religious worship

1-11  at which nonprofit religious services and activities are regularly

1-12  conducted. Such an organization includes, without limitation, an

1-13  integrated auxiliary or affiliate of the organization, men’s, women’s

1-14  or youth groups established by the organization, a school or mission

1-15  society operated by the organization, an organization of local units

1-16  of a church and a convention or association of churches.

1-17      3.  An organization is created for charitable purposes if:

2-1  (a) It complies with the requirements set forth in subsection 5;

2-2  (b) The sole or primary purpose of the organization is to:

2-3       (1) Advance a public purpose, donate or render gratuitously

2-4  or at a reduced rate a substantial portion of its services to the

2-5  persons who are the subjects of its charitable services, and benefit a

2-6  substantial and indefinite class of persons who are the legitimate

2-7  subjects of charity; [or]

2-8       (2) Provide services that are otherwise required to be

2-9  provided by a local government, this state or the Federal

2-10  Government; [and] or

2-11          (3) Operate a hospital or medical facility licensed pursuant

2-12  to chapter 449 or 450 of NRS; and

2-13      (c) The organization is operating in this state.

2-14      4.  An organization is created for educational purposes if:

2-15      (a) It complies with the requirements set forth in subsection 5;

2-16  and

2-17      (b) The sole or primary purpose of the organization is to:

2-18          (1) Provide athletic, cultural or social activities for children;

2-19          (2) Provide displays or performances of the visual or

2-20  performing arts to members of the general public;

2-21          (3) Provide instruction and disseminate information on

2-22  subjects beneficial to the community;

2-23          (4) Operate a school, college or university located in this

2-24  state that conducts regular classes and provides courses of study

2-25  required for accreditation or licensing by the State Board of

2-26  Education or the Commission on Postsecondary Education, or for

2-27  membership in the Northwest Association of Schools and Colleges;

2-28          (5) Serve as a local or state apprenticeship committee to

2-29  advance programs of apprenticeship in this state; or

2-30          (6) Sponsor programs of apprenticeship in this state through

2-31  a trust created pursuant to 29 U.S.C. § 186.

2-32      5.  In addition to the requirements set forth in subsection 2, 3 or

2-33  4, an organization is created for religious, charitable or educational

2-34  purposes if:

2-35      (a) No part of the net earnings of any such organization inures to

2-36  the benefit of a private shareholder, individual or entity;

2-37      (b) The business of the organization is not conducted for profit;

2-38      (c) No substantial part of the business of the organization is

2-39  devoted to the advocacy of any political principle or the defeat or

2-40  passage of any state or federal legislation;

2-41      (d) The organization does not participate or intervene in any

2-42  political campaign on behalf of or in opposition to any candidate for

2-43  public office; and

2-44      (e) Any property sold to the organization for which an

2-45  exemption is claimed is used by the organization in this state in

3-1  furtherance of the religious, charitable or educational purposes of

3-2  the organization.

3-3  Sec.  2.  NRS 374.3306 is hereby amended to read as follows:

3-4  374.3306  1.  For the purposes of NRS 374.3305, an

3-5  organization is created for religious, charitable or educational

3-6  purposes if it complies with the provisions of this section.

3-7  2.  An organization is created for religious purposes if:

3-8  (a) It complies with the requirements set forth in subsection 5;

3-9  and

3-10      (b) The sole or primary purpose of the organization is the

3-11  operation of a church, synagogue or other place of religious worship

3-12  at which nonprofit religious services and activities are regularly

3-13  conducted. Such an organization includes, without limitation, an

3-14  integrated auxiliary or affiliate of the organization, men’s, women’s

3-15  or youth groups established by the organization, a school or mission

3-16  society operated by the organization, an organization of local units

3-17  of a church and a convention or association of churches.

3-18      3.  An organization is created for charitable purposes if:

3-19      (a) It complies with the requirements set forth in subsection 5;

3-20      (b) The sole or primary purpose of the organization is to:

3-21          (1) Advance a public purpose, donate or render gratuitously

3-22  or at a reduced rate a substantial portion of its services to the

3-23  persons who are the subjects of its charitable services, and benefit a

3-24  substantial and indefinite class of persons who are the legitimate

3-25  subjects of charity; [or]

3-26          (2) Provide services that are otherwise required to be

3-27  provided by a local government, this state or the Federal

3-28  Government; [and] or

3-29          (3) Deliver health care through a hospital or medical

3-30  facility licensed pursuant to chapter 449 or 450 of NRS; and

3-31      (c) The organization is operating in this state.

3-32      4.  An organization is created for educational purposes if:

3-33      (a) It complies with the requirements set forth in subsection 5;

3-34  and

3-35      (b) The sole or primary purpose of the organization is to:

3-36          (1) Provide athletic, cultural or social activities for children;

3-37          (2) Provide displays or performances of the visual or

3-38  performing arts to members of the general public;

3-39          (3) Provide instruction and disseminate information on

3-40  subjects beneficial to the community;

3-41          (4) Operate a school, college or university located in this

3-42  state that conducts regular classes and provides courses of study

3-43  required for accreditation or licensing by the State Board of

3-44  Education or the Commission on Postsecondary Education, or for

3-45  membership in the Northwest Association of Schools and Colleges;

4-1       (5) Serve as a local or state apprenticeship committee to

4-2  advance programs of apprenticeship in this state; or

4-3       (6) Sponsor programs of apprenticeship in this state through

4-4  a trust created pursuant to 29 U.S.C. § 186.

4-5  5.  In addition to the requirements set forth in subsection 2, 3 or

4-6  4, an organization is created for religious, charitable or educational

4-7  purposes if:

4-8  (a) No part of the net earnings of any such organization inures to

4-9  the benefit of a private shareholder, individual or entity;

4-10      (b) The business of the organization is not conducted for profit;

4-11      (c) No substantial part of the business of the organization is

4-12  devoted to the advocacy of any political principle or the defeat or

4-13  passage of any state or federal legislation;

4-14      (d) The organization does not participate or intervene in any

4-15  political campaign on behalf of or in opposition to any candidate for

4-16  public office; and

4-17      (e) Any property sold to the organization for which an

4-18  exemption is claimed is used by the organization in this state in

4-19  furtherance of the religious, charitable or educational purposes of

4-20  the organization.

4-21      Sec.  3.  This act becomes effective on July 1, 2003.

 

4-22  H