A.B. 535
- *AB535*
ASSEMBLY BILL NO. 535–COMMITTEE ON REVENUE
MARCH 24, 2025
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Referred to Committee on Revenue
SUMMARY—Revises provisions relating to the sales tax
exemption for organizations created for religious,
charitable or educational purposes. (BDR 32-812)
FISCAL NOTE: Effect on Local Government: No.
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 taxation; revising provisions governing the
administration of the exemption from sales and use taxes
for organizations created for religious, charitable or
educational purposes; and providing other matters
properly relating thereto.
Legislative Counsel’s Digest:
Existing law imposes upon each retailer a sales tax measured by the gross 1
receipts of the retailer from the retail sale of tangible personal property in this State, 2
and requires the retailer to collect the sales tax from the purchaser in a transaction 3
to which the sales tax applies. (NRS 372.105, 372.110, 374.110, 374.111, 374.115) 4
Existing law also imposes a use tax on the storage, use or other consumption in this 5
State of tangible personal property purchased outside of this State from a retailer in 6
a transaction that would have been subject to the sales tax in this State if it had 7
occurred within this State. (NRS 372.185, 374.190, 374.191) 8
Existing law exempts from such taxes the gross receipts from the sale of any 9
tangible personal property sold by or to a nonprofit organization created for 10
religious, charitable or educational purposes. (NRS 372.326, 374.3306) Under 11
existing law, among other requirements, an organization that claims this exemption 12
is required to establish that the sole or primary purpose of the organization is to 13
further certain specified purposes deemed to be religious, charitable or educational. 14
(NRS 372.3261, 374.3306) This bill authorizes an organization to satisfy that 15
requirement by establishing that it operates exclusively for a purpose exempt under 16
section 501(c)(3) of the Internal Revenue Code and is recognized as exempt by the 17
Internal Revenue Service under the provision of that section. 18
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THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. NRS 372.3261 is hereby amended to read as 1
follows: 2
372.3261 1. For the purposes of NRS 372.326 [,] and 3
372.348, an organization is created for religious, charitable or 4
educational purposes if it complies with the provisions of this 5
section. 6
2. An organization is created for religious purposes if: 7
(a) It complies with the requirements set forth in subsection [5;] 8
6; and 9
(b) The sole or primary purpose of the organization is the 10
operation of a church, synagogue or other place of religious worship 11
at which nonprofit religious services and activities are regularly 12
conducted. Such an organization includes, without limitation, an 13
integrated auxiliary or affiliate of the organization, men’s, women’s 14
or youth groups established by the organization, a school or mission 15
society operated by the organization, an organization of local units 16
of a church and a convention or association of churches. 17
3. An organization is created for charitable purposes if: 18
(a) It complies with the requirements set forth in subsection [5;] 19
6; 20
(b) The sole or primary purpose of the organization is to: 21
(1) Advance a public purpose, donate or render gratuitously 22
or at a reduced rate a substantial portion of its services to the 23
persons who are the subjects of its charitable services, and benefit a 24
substantial and indefinite class of persons who are the legitimate 25
subjects of charity; 26
(2) Provide services that are otherwise required to be 27
provided by a local government, this State or the Federal 28
Government; or 29
(3) Operate a hospital or medical facility licensed pursuant to 30
chapter 449 or 450 of NRS; and 31
(c) The organization is operating in this State. 32
4. An organization is created for educational purposes if: 33
(a) It complies with the requirements set forth in subsection [5;] 34
6; and 35
(b) The sole or primary purpose of the organization is to: 36
(1) Provide athletic, cultural or social activities for children; 37
(2) Provide displays or performances of the visual or 38
performing arts to members of the general public; 39
(3) Provide instruction and disseminate information on 40
subjects beneficial to the community; 41
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(4) Operate a school, college or university located in this 1
State that conducts regular classes and provides courses of study 2
required for accreditation or licensing by the State Board of 3
Education or the Commission on Postsecondary Education, or for 4
membership in the Northwest Association of Schools and of 5
Colleges and Universities; 6
(5) Serve as a local or state apprenticeship committee to 7
advance programs of apprenticeship in this State; or 8
(6) Sponsor programs of apprenticeship in this State through 9
a trust created pursuant to 29 U.S.C. § 186. 10
5. An organization is created for religious, charitable or 11
educational purposes if the organization: 12
(a) Complies with the requirements of subsection 6; 13
(b) Operates exclusively for any exempt purpose under section 14
501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3), and 15
the organization is recognized as exempt by the Internal Revenue 16
Service pursuant to section 501(c)(3) of the Internal Revenue 17
Code, 26 U.S.C. § 501(c)(3); and 18
(c) Is operating in this State. 19
6. In addition to the requirements set forth in [subsection] 20
subsections 2 [, 3 or 4,] to 5, inclusive, an organization is created 21
for religious, charitable or educational purposes if: 22
(a) No part of the net earnings of any such organization inures to 23
the benefit of a private shareholder, individual or entity; 24
(b) The business of the organization is not conducted for profit; 25
(c) No substantial part of the business of the organization is 26
devoted to the advocacy of any political principle or the defeat or 27
passage of any state or federal legislation; 28
(d) The organization does not participate or intervene in any 29
political campaign on behalf of or in opposition to any candidate for 30
public office; and 31
(e) Any property sold to the organization for which an 32
exemption is claimed is used by the organization in this State in 33
furtherance of the religious, charitable or educational purposes of 34
the organization. 35
Sec. 2. NRS 374.3306 is hereby amended to read as follows: 36
374.3306 1. For the purposes of NRS 374.3305 [,] and 37
374.353, an organization is created for religious, charitable or 38
educational purposes if it complies with the provisions of this 39
section. 40
2. An organization is created for religious purposes if: 41
(a) It complies with the requirements set forth in subsection [5;] 42
6; and 43
(b) The sole or primary purpose of the organization is the 44
operation of a church, synagogue or other place of religious worship 45
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at which nonprofit religious services and activities are regularly 1
conducted. Such an organization includes, without limitation, an 2
integrated auxiliary or affiliate of the organization, men’s, women’s 3
or youth groups established by the organization, a school or mission 4
society operated by the organization, an organization of local units 5
of a church and a convention or association of churches. 6
3. An organization is created for charitable purposes if: 7
(a) It complies with the requirements set forth in subsection [5;] 8
6; 9
(b) The sole or primary purpose of the organization is to: 10
(1) Advance a public purpose, donate or render gratuitously 11
or at a reduced rate a substantial portion of its services to the 12
persons who are the subjects of its charitable services, and benefit a 13
substantial and indefinite class of persons who are the legitimate 14
subjects of charity; 15
(2) Provide services that are otherwise required to be 16
provided by a local government, this State or the Federal 17
Government; or 18
(3) Operate a hospital or medical facility licensed pursuant to 19
chapter 449 or 450 of NRS; and 20
(c) The organization is operating in this State. 21
4. An organization is created for educational purposes if: 22
(a) It complies with the requirements set forth in subsection [5;] 23
6; and 24
(b) The sole or primary purpose of the organization is to: 25
(1) Provide athletic, cultural or social activities for children; 26
(2) Provide displays or performances of the visual or 27
performing arts to members of the general public; 28
(3) Provide instruction and disseminate information on 29
subjects beneficial to the community; 30
(4) Operate a school, college or university located in this 31
State that conducts regular classes and provides courses of study 32
required for accreditation or licensing by the State Board of 33
Education or the Commission on Postsecondary Education, or for 34
membership in the Northwest Association of Schools and of 35
Colleges and Universities; 36
(5) Serve as a local or state apprenticeship committee to 37
advance programs of apprenticeship in this State; or 38
(6) Sponsor programs of apprenticeship in this State through 39
a trust created pursuant to 29 U.S.C. § 186. 40
5. An organization is created for religious, charitable or 41
educational purposes if the organization: 42
(a) Complies with the requirements of subsection 6; 43
(b) Operates exclusively for any exempt purpose under section 44
501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3), and 45
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the organization is recognized as exempt by the Internal Revenue 1
Service pursuant to section 501(c)(3) of the Internal Revenue 2
Code, 26 U.S.C. § 501(c)(3); and 3
(c) Is operating in this State. 4
6. In addition to the requirements set forth in [subsection] 5
subsections 2 [, 3 or 4,] to 5, inclusive, an organization is created 6
for religious, charitable or educational purposes if: 7
(a) No part of the net earnings of any such organization inures to 8
the benefit of a private shareholder, individual or entity; 9
(b) The business of the organization is not conducted for profit; 10
(c) No substantial part of the business of the organization is 11
devoted to the advocacy of any political principle or the defeat or 12
passage of any state or federal legislation; 13
(d) The organization does not participate or intervene in any 14
political campaign on behalf of or in opposition to any candidate for 15
public office; and 16
(e) Any property sold to the organization for which an 17
exemption is claimed is used by the organization in this State in 18
furtherance of the religious, charitable or educational purposes of 19
the organization. 20
Sec. 3. This act becomes effective on July 1, 2025. 21
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