The case for sales tax exemption for non-profits
Today, Representative Corey Mock’s bill, HB 1240, which would have provided sales tax exemptions for non-profit organizations, died on the House floor. The discussion of non-profits has been framed in the wrong light for too long, and a legislator’s remark, “why should non-profits survive on scraps from the government,” illustrates the pervasive misunderstanding of the role non-profits play. Not only are non-profits NOT groveling for scraps, non-profit organizations are a robust part of our economy that save the state, counties and cities money. And not only that- they MAKE money for their communities.
Our local, state and national government rely on non-profits to provide vital services to our citizens. Non-profits serve veterans, people with disabilities, children, senior citizens, families and the general public. They include organizations like the Circle of Friends Humane Society, the United Way, Community Violence Intervention Center, Lutheran Social Services, the Northland Rescue Mission, and PATH- all organizations that do not have for-profit counterparts. The services non-profits provide are services that the state does not have to pay for. Fewer state-provided services equal smaller government.
The majority of organizations that offer tourism destinations in North Dakota are non-profit organizations. What would North Dakota’s tourism revenue be without the Lewis and Clark/Fort Mandan Association? The Theodore Roosevelt/ Medora Association? The Norsk Hjostfest? Just to name a few. Non-profit cultural events and locations make community restaurants, hotels and shops a lot of tourist revenue. For example, my organization, the North Valley Arts Council, produces the Grand Cities Art Fest every June. Art Fest draws 40,000 people to Grand Forks, and during the weekend of Art Fest, almost every hotel room in Grand Forks is full. This is the same draw and revenue pull as UND hockey game weekends.
Much of the national funding available to non-profits- both public and private- is unstable if not already dried up. North Dakota is lucky that we are not forced to make budget cutbacks, but almost every federal funding source for non-profits in every sector has been or will be reduced. Charitable organizations and their clients are still recovering from the economic downturn and, with government dollars becoming scarcer, people are turning to the organizations they know and trust for help. But as citizens tighten their own finances, the nonprofit sector is forced to end critical programs and make due with fewer resources.
The extra programing my organization could provide if we were exempt from sales tax could be 20 weeks of Healthy Living through Art for patients at the Third Street Clinic, a full summer of art classes and English speaking experience for the Global Friends Coalition new American children. We could hire a part-time graphic designer to better market our arts community and create more arts and tourism revenue. The list is endless.
If North Dakota’s 63rd Assembly is willing to give hundreds of millions of dollars of tax cuts and incentives to out-of-state oil companies, can we not spare this relatively small amount for community-partner organizations? To organizations that make our state a legendary place to visit and live? North Dakota does not need to profit off of the backs of the organizations that keep our citizens and state healthy.