Kentucky nonprofit sales tax exemption


The regulation was part of a “cleanup” bill (Housage Bill 354) intfinished to correct components of a hastily passed tax bill from last year.

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The network-related helped get the task done for nonrevenues in 2019 by urging them to call legislators to let them understand exactly how burdensome being compelled to charge sales taxes was, said Danielle Clore, KNN’s president and also chief executive. It also functioned via lawmachines to come up via the best legislative solution.

The sales taxes growth, which took result last summer, was frustrating, she said, not just bereason of the governmental headaches it caused nonearnings but additionally because it was a hindrance to raising dollars to provide solutions.

Both KNN and also the Center for Nonprofit Excellence worked with nonrevenues to aid them comply with the legislation while it was in result and are doing the exact same to let nonprofits know they are currently free — for the a lot of component.

“Due to an emergency clausage in this (2019) legislation, sales of adgoals and also tangible residential property sales at fundelevating occasions by all nonprofit groups and governpsychological institutions are currently exempt from sales taxes for transactions on or after March 26, 2019,” the Kentucky Department of Revenue claims on its website. “… All of these nonprofit institutions must discontinue charging sales tax to their customers and benecomponents immediately.”

However, the exemption doesn’t apply to sales by retail businesses, such as bookstores and thrift stores, that are owned or operated by nonprofit or governpsychological teams, according to the department.

See more: The Economic Impact Of Nonprofit Organizations, Economic Impact Of Nonprofit Organizations

So sales taxes still applies as soon as you’re “routinely and straight competing through a for-profit,” yet that would certainly not use to something like an company having actually an occasional bake sale, Clore sassist.

The brand-new law, signed by Gov. Matt Bevin March 26, took result right ameans because of an emergency clause that Clore sassist was “incredibly crucial.”

“We recognize establishments are headed right into a really hefty spring and also summer fundraising seachild, definitely in Louisville, about the Derby, and so we were thrilled because otherwise it would have come to be efficient in late June or July,” Clore said.

Organizations celebrating the exemption incorporate Fern Creek Highview United Ministries, where families through relatives in an adult day regime will certainly no much longer need to pay sales taxation, and also the Kentucky Derby Museum.


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Patrick Armsolid | Photograph courtesy of the Derby Museum


The exemption “really provides us relief from the administrative process of simply collecting and also remitting taxes yet additionally obviously the financial burden,” museum President and also Chief Executive Patrick Armsolid said. “We had actually to charge tax on adobjectives, membership, occasion tickets and rentals.”

Armstrong shelp he didn’t know offhand also how much the sales taxes development expense the museum, however he said “we’re exceptionally pleased that the lawequipments rerelocated the tax burden from us and happy that the legislature passed the bill and that the governor signed it.”


Darla Carter is a hometvery own girl who freshly joined the staff of Insider Louisville to greatly cover health and wellness. She formerly served as a longtime health and wellness and fitness writer for The Courier-Journal, wbelow she additionally operated for the Metro, Neighborhoods and also Features departments. Prior to that, the award-winning journalist wrote for newspapers elsewhere in Kentucky and Tennescheck out, extending a variety of topics, from education to courts. She"s a graduate of Western Kentucky College, where she studied journalism and ideology, and also is the proud mom of two young youngsters.