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- 83rd Session (2025)
Assembly Bill No. 535–Committee on Revenue
CHAPTER..........
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; requiring the Department of T axation to report to
the Legislature certain information concerning applications
for such an exemption; and providing other matters properly
relating thereto.
Legislative Counsel’s Digest:
Existing law imposes upon each retailer a sales tax measured by th e gross
receipts of the retailer from the retail sale of tangible personal property in this State,
and requires the retailer to collect the sales tax from the purchaser in a transaction
to which the sales tax applies. (NRS 372.105, 372.110, 374.110, 374.11 1, 374.115)
Existing law also imposes a use tax on the storage, use or other consumption in this
State of tangible personal property purchased outside of this State from a retailer in
a transaction that would have been subject to the sales tax in this Stat e if it had
occurred within this State. (NRS 372.185, 374.190, 374.191)
Existing law exempts from such taxes the gross receipts from the sale of any
tangible personal property sold by or to a nonprofit organization created for
religious, charitable or edu cational purposes. (NRS 372.326, 374.3306) Under
existing law, among other requirements, an organization that claims this exemption
is required to establish that the sole or primary purpose of the organization is to
further certain specified purposes deemed to be religious, charitable or educational.
(NRS 372.3261, 374.3306) Sections 1 and 2 of this bill establish criteria for the
Department of Taxation and the Nevada Tax Commission to use to determine
whether an organization satisfies the requirements to b e exempt from sales and use
taxes as a charitable organization, including, without limitation, by the organization
establishing that it : (1) operates exclusively for a purpose exempt under section
501(c)(3) of the Internal Revenue Code and is recognized as exempt by the Internal
Revenue Service under the provision of that section ; or (2) furthers at least one of
certain specified purposes. Sections 1.5 and 2.3 of this bill require the Department
to: (1) prov ide to an organization that does not qualify for the exemption as a
religious, charitable or educational organization a full explanation outlining the
reasons why the organization does not qualify and the procedure to appeal such a
determination; and (2) s ubmit to the Legislature every odd -numbered year a report
concerning applications for the tax exemption.
EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
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
follows:
372.3261 1. For the purposes of NRS 372.326 [,] and
372.348, an organization is created for religious, charitable or
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educational purposes if it complies with the provisions of this
section.
2. An organization is created for religious purposes if:
(a) It complies with the requirements set forth in subsection [5;]
6; and
(b) The sole or primary purpose of the organization is the
operation of a church, synagogue or other place of religious worship
at which nonprofit religious services and activities are regularly
conducted. Such an organization includes, without limitation, an
integrated auxiliary or affiliate of the organization, men’s, women’s
or youth groups established by the organization, a school or mission
society operated by the organization, an o rganization of local units
of a church and a convention or association of churches.
3. An organization is created for charitable purposes if:
(a) It complies with the requirements set forth in subsection [5;]
6;
(b) The sole or primary purpose of the organization ,
considering the factors set forth in subsection 5, is to:
(1) Advance a public purpose, donate or render gratuitously
or at a reduced rate a substantial portion of its services to the
persons who are the subjects of its charitable services , and benefit a
substantial and indefinite class of persons who are the legitimate
subjects of charity;
(2) Provide services that are otherwise required to be
provided by a local government, this State or the Federal
Government; or
(3) Operate a hospital or medical facility licensed pursuant to
chapter 449 or 450 of NRS; and
(c) The organization is operating in this State.
4. An organization is created for educational purposes if:
(a) It complies with the requirements set forth in subsection [5;]
6; and
(b) The sole or primary purpose of the organization is to:
(1) Provide athletic, cultural or social activities for children;
(2) Provide displays or performances of the visual or
performing arts to members of the general public;
(3) Provide ins truction and disseminate information on
subjects beneficial to the community;
(4) Operate a school, college or university located in this
State that conducts regular classes and provides courses of study
required for accreditation or licensing by the Sta te Board of
Education or the Commission on Postsecondary Education, or for
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membership in the Northwest Association of Schools and of
Colleges and Universities;
(5) Serve as a local or state apprenticeship committee to
advance programs of apprenticeship in this State; or
(6) Sponsor programs of apprenticeship in this State through
a trust created pursuant to 29 U.S.C. § 186.
5. In determining whether , for the purposes of subsection 3,
an organization is created for charitable purposes, the Department
and Nevada Tax Commission shall consider , without limitation,
whether the organization:
(a) Operates exclusively for any exempt purpose under section
501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3), and
the organization is rec ognized as exempt by the Internal Revenue
Service pursuant to section 501(c)(3) of the Internal Revenue
Code, 26 U.S.C. § 501(c)(3);
(b) Provides relief to the poor, distressed or underprivileged;
(c) Supports the advancement of religion;
(d) Provides for the advancement of education or science;
(e) Helps lessen the burden of government;
(f) Supports efforts to eliminate prejudice and discrimination;
(g) Aids in defending human and civil rights secured by law;
or
(h) Combats commu nity deterioration and juvenile
delinquency.
6. In addition to the requirements set forth in [subsection]
subsections 2 [, 3 or 4, ] to 5, inclusive, an organization is created
for religious, charitable or educational purposes if:
(a) No part of the net earnings of any such organization inures to
the benefit of a private shareholder, individual or entity;
(b) The business of the organization is not conducted for profit;
(c) No substantial part of the business of the organization is
devoted to the advocacy of any political principle or the defeat or
passage of any state or federal legislation;
(d) The organization does not participate or intervene in any
political campaign on behalf of or in opposition to any candidate for
public office; and
(e) Any property sold to the organization for which an
exemption is claimed is used by the organization in this State in
furtherance of the religious, charitable or educational purposes of
the organization.
Sec. 1.5. NRS 372.348 is hereby amended to read as follows:
372.348 1. Any nonprofit organization created for religious,
charitable or educational purposes that wishes to claim an
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exemption pursuant to NRS 372.326, must file an application with
the Department to obtain a letter of exemption. The application must
be on a form and contain such information as is required by the
Department.
2. If the Department determines that the organization is created
for religious, charitable or educational purposes, it shall issue a
letter of exe mption to the organization. The letter of exemption
expires 5 years after the date on which it is issued by the
Department. At least 90 days before the expiration of the letter of
exemption, the Department shall notify the organization to whom
the letter was issued of the date on which the letter will expire. The
organization may renew its letter of exemption for an additional 5
years by filing an application for renewal with the Department. The
application for renewal must be on a form and contain such
information as is required by the Department.
3. If the Department determines that the organization is not
created for religious, charitable or educational purposes, or
otherwise does not meet the requirements to receive the exemption,
the Department shall provide the organization with a full
explanation outlining the reasons why the organization does not
qualify for the exemption and the procedure to appeal the
determination.
4. The Department shall, on or before January 15 of each
odd-numbered year, subm it to the Director of the Legislative
Counsel Bureau for transmittal to the next session of the
Legislature a report which must include , for the immediately
preceding biennium:
(a) Any processes and techniques for reviewing applications
for an exemption submitted pursuant to this section;
(b) The number of applications submitted pursuant to this
section;
(c) The number of applications approved;
(d) The number of applications denied;
(e) The total number of organizations that receive d an
exemption pursuant to NRS 372.326; and
(f) Any other relevant information.
5. To claim an exemption pursuant to NRS 372.326 for the sale
of tangible personal property to such an organization:
(a) The organization must give a copy of its letter of exemption
to the ret ailer from whom the organization purchases the property;
and
(b) The retailer must retain and present upon request a copy of
the letter of exemption.
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[4.] 6. The Department shall adopt such regulations as are
necessary to carry out the provisions of this section.
Sec. 2. NRS 374.3306 is hereby amended to read as follows:
374.3306 1. For the purposes of NRS 374.3305 [,] and
374.353, an organization is created for religious, charitable or
educational purposes if it complies with the provisions of this
section.
2. An organization is created for religious purposes if:
(a) It complies with the requirements set forth in subsection [5;]
6; and
(b) The sole or primary purpose of the organization is the
operation of a church, synagogue or other place of religious worship
at which nonprofit religious services and activities are regularly
conducted. Such an organization includes, without limitation, an
integrated auxiliary or affiliate of the organization, men’s, women’s
or youth groups established by the organization, a school or mission
society operated by the organization, an organization of local units
of a church and a convention or association of churches.
3. An organization is created for charitable purposes if:
(a) It complies with the requirements set forth in subsection [5;]
6;
(b) The sole or primary purpose of the organization ,
considering the factors set forth in subsection 5, is to:
(1) Advance a public purpose, donate or render gratuitously
or at a redu ced rate a substantial portion of its services to the
persons who are the subjects of its charitable services, and benefit a
substantial and indefinite class of persons who are the legitimate
subjects of charity;
(2) Provide services that are otherwise required to be
provided by a local government, this State or the Federal
Government; or
(3) Operate a hospital or medical facility licensed pursuant to
chapter 449 or 450 of NRS; and
(c) The organization is operating in this State.
4. An organization is created for educational purposes if:
(a) It complies with the requirements set forth in subsection [5;]
6; and
(b) The sole or primary purpose of the organization is to:
(1) Provide athletic, cultural or social activities for children;
(2) Provide displays or performances of the visual or
performing arts to members of the general public;
(3) Provide instruction and disseminate information on
subjects beneficial to the community;
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(4) Operate a school, college or university located in this
State that conducts regular classes and provides courses of study
required for accreditation or licensing by the State Board of
Education or the Commission on Postsecondary Education, or for
membership in the Northwest Association of Schools and of
Colleges and Universities;
(5) Serve as a local or state apprenticeship committee to
advance programs of apprenticeship in this State; or
(6) Sponsor programs of apprenticeship in this State through
a trust created pursuant to 29 U.S.C. § 186.
5. In determining w hether, for the purposes of subsection 3,
an organization is created for charitable purposes, the Department
and Nevada Tax Commission shall consider , without limitation,
whether the organization:
(a) Operates exclusively for any exempt purpose under section
501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3), and
the organization is recognized as exempt by the Internal Revenue
Service pursuant to section 501(c)(3) of the Internal Revenue
Code, 26 U.S.C. § 501(c)(3);
(b) Provides relief to the poor, distressed or underprivileged;
(c) Supports the advancement of religion;
(d) Provides for the advancement of education or science;
(e) Helps lessen the burden of government;
(f) Supports efforts to eliminate prejudice and discrimination;
(g) Aids in defending human and civil rights secured by law;
or
(h) Combats community deterioration and juvenile
delinquency.
6. In addition to the requirements set forth in [subsection]
subsections 2 [, 3 or 4,] to 5, inclusive, an organization is created
for religious, charitable or educational purposes if:
(a) No part of the net earnings of any such organization inures to
the benefit of a private shareholder, individual or entity;
(b) The business of the organization is not conducted for profit;
(c) No substantial part of the business of the organization is
devoted to the advocacy of any political principle or the defeat or
passage of any state or federal legislation;
(d) The organization does not part icipate or intervene in any
political campaign on behalf of or in opposition to any candidate for
public office; and
(e) Any property sold to the organization for which an
exemption is claimed is used by the organization in this State in
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furtherance of th e religious, charitable or educational purposes of
the organization.
Sec. 2.3. NRS 374.353 is hereby amended to read as follows:
374.353 1. Any nonprofit organization created for religious,
charitable or educational purposes that wishes to claim an
exemption pursuant to NRS 374.3305 must file an application with
the Department to obtain a letter of exemption. The application must
be on a form and contain such information as is required by the
Department.
2. If the Department determines that the organization is created
for religious, charitable or educational purposes, it shall issue a
letter of exemption to the organization. The letter of exemption
expires 5 years after the date on which it is issued by the
Department. At least 90 days before the expiration of the letter of
exemption, the Department shall notify the organization to whom
the letter was issued of the date on which the letter will expire. The
organization may renew its letter of exemption for an addition al 5
years by filing an application for renewal with the Department. The
application for renewal must be on a form and contain such
information as is required by the Department.
3. If the Department determines that the organization is not
created for rel igious, charitable or educational purposes, or
otherwise does not meet the requirements to receive the exemption,
the Department shall provide the organization with a full
explanation outlining the reasons why the organization does not
qualify for the exem ption and the procedure to appeal the
determination.
4. The Department shall, on or before January 15 of each
odd-numbered year, submit to the Director of the Legislative
Counsel Bureau for transmittal to the next session of the
Legislature a report whic h must include, for the immediately
preceding biennium:
(a) Any process es and techniques for reviewing applications
for an exemption submitted pursuant to this section;
(b) The number of applications submitted pursuant to this
section;
(c) The number of applications approved;
(d) The number of applications denied;
(e) The total number of organizations that received an
exemption pursuant to NRS 374.3305; and
(f) Any other relevant information.
5. To claim an exemption pursuant to NRS 374.3305 for the
sale of tangible personal property to such an organization:
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(a) The organization must give a copy of its letter of exemption
to the retailer from whom the organization purchases the property;
and
(b) The retailer must retain and present upon request a c opy of
the letter of exemption.
[4.] 6. The Department shall adopt such regulations as are
necessary to carry out the provisions of this section.
Sec. 2.7. The provisions of subsection 1 of NRS 218D.380 do
not apply to any provision of this act which adds or revises a
requirement to submit a report to the Legislature.
Sec. 3. This act becomes effective on July 1, 2025.
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