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HB 1428

A BILL for an Act to create and enact a new subsection to section 57-39.2-04 of the North Dakota Century Code, relating to a sales tax exemption for sales of clothing by a thrift store of a nonprofit corporation; and to provide an effective date.

69th Legislative Assembly (2025-26) Introduced by Dick Anderson and 7 co-sponsors

ND bill would exempt gross receipts from clothing sold by qualifying 501(c)(3) nonprofit thrift stores from state sales tax, effective after 6/30/2025

Second reading, failed to pass, yeas 37 nays 54
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WeVote Research Nonpartisan
Bill Summary · HB 1428

Summary — HB 1428 (North Dakota): Sales‑tax exemption for thrift‑store clothing sales

Status: Introduced Nov 20, 2024. Second reading — failed to pass (yeas 37, nays 54).
Primary sponsors: Representatives Vetter, D. Anderson, Christianson, Grueneich, Karls, Kiefert; Senators Cleary, Dever.

Main purpose

To create a sales‑tax exemption in North Dakota for gross receipts from sales of clothing by a thrift store owned and operated by a nonprofit corporation that is exempt from federal taxation under 26 U.S.C. § 501(c)(3).

Key provisions

  • Adds a new subsection to NDCC § 57‑39.2‑04 that exempts gross receipts from sales of clothing made by a qualifying 501(c)(3) nonprofit thrift store.
  • Provides definitions to limit the scope of “clothing” and to exclude certain items:
    • “Clothing” — human wearing apparel suitable for general use; expressly excludes belts/belt buckles or costume masks sold separately, clothing accessories or equipment, protective equipment, and sport or recreational equipment.
    • “Clothing accessories or equipment” — incidental items worn with clothing (examples: briefcases, handbags, jewelry, sunglasses, watches, wigs).
    • “Protective equipment” — items designed to protect wearer or others not suitable for general use (examples: breathing masks, face shields, hard hats, protective gloves, safety glasses/goggles, tool belts).
    • “Sport or recreational equipment” — items worn for athletic/recreational activities not suitable for general use (examples: ballet/tap shoes, cleated/spiked athletic shoes, guards, roller/ice skates, waders, wetsuits).
  • Effective date: taxable events occurring after June 30, 2025.

Variations and amendments

  • A Legislative Council staff draft/committee amendment limited the exemption to “used clothing” sold by qualifying thrift stores (rather than all clothing sales). The engrossed Senate amendment text refers broadly to “clothing.” The bill record shows multiple amendment iterations.

Who would be affected

  • Directly: qualifying nonprofit thrift stores (501(c)(3) owners/operators) and their customers — sales of covered clothing would be exempt from state sales tax.
  • Indirectly: state sales tax receipts (potential revenue loss) and possibly competing retailers (price/market effects).

Fiscal impact and notes

  • No North Dakota fiscal note included in the provided materials. The revenue effect depends on the scope (new vs. used clothing only), the number and volume of thrift‑store clothing sales, and local sales tax interactions. Likely outcome: modest reduction in state sales tax collections; exact magnitude not provided.
  • The bill did not advance past second reading (failed 37–54). If reintroduced, key considerations will include estimating revenue loss and clarifying whether exemption applies only to used clothing.

Compiled from official sources — confirm details with the bill’s official record.

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