Page 1 of 1 LRC 2025-BR21-HB37
COMMONWEALTH OF KENTUCKY FISCAL NOTE STATEMENT
LEGISLATIVE RESEARCH COMMISSION
2025 REGULAR SESSION
MEASURE
2025 BR NUMBER 21 HOUSE BILL NUMBER 37
TITLE AN ACT relating to an exemption from sales and use tax for certain nonprofit institutions.
SPONSOR Representative James Tipton
FISCAL SUMMARY
STATE FISCAL IMPACT: YES NO UNCERTAIN
OTHER FISCAL STATEMENT (S) THAT MAY APPLY: ACTUARIAL ANALYSIS
LOCAL MANDATE CORRECTIONS IMPACT HEALTH BENEFIT MANDATE
APPROPRIATION UNIT(S) IMPACTED:
FUND(S) IMPACTED: GENERAL ROAD FEDERAL RESTRICTED
FISCAL ESTIMATES 2024-2025 2025-2026 ANNUAL IMPACT AT FULL
IMPLEMENTATION
REVENUES ($3,800,000) ($4,300,000)
EXPENDITURES
NET EFFECT ($3,800,000) ($4,300,000)
( ) indicates a decrease/negative
PURPOSE OF MEASURE: HB 37 would exempt resident, nonprofit educational, charitable, or
religious institutions from sales and use tax on their sales to customers of tangible personal property,
digital property, or services. Currently, they are exempt from tax on purchases they make of tangible
personal property, digital property, or services which are used solely within the educational, charitable, or
religious function. The new exemption would not apply to sales at a tourism development project
approved under KRS 148.851 to 148.860 nor to an institution that qualifies for a refund of a portion of the
tax collected on its sales of donated goods as provided in subsection (3) of KRS 139.495.
FISCAL EXPLANATION: The potential fiscal impact of HB 113 has been estimated based on data
from the United States Census Bureau’s North American Product Classification System. A negative
impact of $3,800,000 is estimated for fiscal year 2025-2026. Without a specific date of application, the
legislation would become effective 90 days after sine die of the 2025 Regular Session. Upon full
implementation, the fiscal impact is estimated to be a negative impact to the general fund of $4,300,000.
DATA SOURCE(S): https://www.census.gov/programs-surveys/economic-census/year/2017/ economic-
census-2017/guidance/understanding-napcs.html; LRC Economists and Appropriations and Revenue
Staff
PREPARER: Katy Jenkins NOTE NUMBER : 5 REVIEW: JMR DATE: 1/16/2025