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SB 2369

AN ACT to amend and reenact subsection 4 of section 57-39.2-04 of the North Dakota Century Code, relating to exempt sales from educational, religious, or charitable activities conducted by a nonprofit organization in a publicly or privately owned facility; and to provide an effective date.

69th Legislative Assembly (2025-26) Introduced by Sean Cleary

Nonprofits must pay fair market rent to use facilities and spend all net receipts on qualifying purposes for their educational, religious, or charitable activities to keep the sale

Filed with Secretary Of State 03/26
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Bill Summary · SB 2369

Summary — North Dakota SB 2369 (Sixty-ninth Legislative Assembly)

Title: AN ACT to amend and reenact subsection 4 of section 57‑39.2‑04 of the North Dakota Century Code — sales tax exemptions for educational, religious, or charitable activities; effective date.

Purpose / Intent

SB 2369 clarifies and modifies the sales tax exemption for gross receipts from educational, religious, or charitable activities conducted by nonprofit organizations. The bill conditions the exemption on payment of fair‑market rent when a nonprofit uses a publicly or privately owned facility and preserves other existing carve‑outs (higher education, public school districts, nonprofit performing arts organizations).

Key provisions

  • Amends subsection 4 of NDCC §57‑39.2‑04 (exempt gross receipts).
  • Retains general exemptions for:
    • Ticket/admissions sales to fairs;
    • Events of institutions of higher education (student performers);
    • Public school district receipts (when expended per ND law);
    • Nonprofit music/dramatic arts organizations that present live performances regularly.
  • Adds / clarifies a specific condition (subdivision f): gross receipts derived by a nonprofit from educational, religious, or charitable activities conducted in a publicly or privately owned facility are exempt only if:
    • The nonprofit pays fair market rent for the use of the facility; and
    • The entire amount of net receipts is expended for educational, religious, or charitable purposes.
  • Retains language excluding the exemption where:
    • Gross receipts from taxable sales for an event in a publicly owned facility exceed $10,000 (for events not otherwise exempt under c, d, e, or f); or
    • The seller competes with retailers (maintains inventory, conducts regular retail sales from a permanent/seasonal location, or solicits sales via a seller‑maintained website).

Who is affected

  • Nonprofit organizations that hold fundraisers, ticketed events, or other qualifying activities in publicly or privately owned facilities — especially those currently using public facilities rent‑free or below fair market rate.
  • Publicly owned facility operators and private venue owners that waive or discount rent to nonprofits.
  • Retailers and vendors whose activities by nonprofits may be characterized as competing retail sales (those sales remain taxable).
  • State and local tax administrators (Department of Revenue) — for compliance and enforcement.

Fiscal and operational impact

  • Likely increases state and local sales tax receipts where nonprofits previously held exempt events in facilities without paying fair market rent (those receipts would be taxable under the amendment).
  • May prompt nonprofits to pay market rent or restructure events to preserve exemption (or to document that net receipts are fully expended for qualifying purposes).
  • Administrative effect: additional determinations about what constitutes “fair market rent” and documentation of net‑receipt expenditures.

Procedural / timeline

  • Introduced in the North Dakota Senate by Sen. Cleary (received by Secretary of the Senate 03/12/2025; filed with Secretary of State 03/26/2025).
  • Enactment language specifies the Act is effective for taxable events occurring after June 30, 2025.
  • Legislative record included final passage votes (Senate 47–0; House 67–26) and Governor signature/filing actions dated March 24–26, 2025 in the provided documents.

Note: the supplied packet also contains text from an unrelated Illinois bill labeled SB2369 (Secure Telecommunications Act). This summary addresses the North Dakota SB 2369 that amends NDCC §57‑39.2‑04.

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

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