NC S397

Repeals prior nonprofit sales tax exemption provisions and creates new exemption framework under G.S. 105-164.13(52a) for certain nonprofits exempt from federal income tax, excluding those classified in Community Improvement, Public and Societal Benefit, or Mutual and Membership Benefit categories.

Establishes application process requiring nonprofits to obtain sales tax exemption number from Department of Revenue; nonprofits misusing exemption must pay back taxes plus interest.

Caps aggregate annual exemption at $31,700,000 in state tax and $13,300,000 in local tax per fiscal year.

Exempts nonprofit fundraising events from entertainment tax if held solely for fundraising purposes by organizations exempt under federal Article 4, even if entertainment activities are offered as ancillary purpose.

Effective October 1, 2023 for most provisions; fundraising event exemption effective July 1, 2023.