Lawtonian testifies about sales tax exemptions for nonprofits

OKLAHOMA CITY — Lauren Ellis, United Way of Southwest Oklahoma President and CEO, testified Monday on the impact of sales tax exemptions for nonprofits.

Ellis was part of a panel speaking during an interim study examining the fiscal impact of providing sales tax exemptions for certain nonprofits. The study was conducted by state Rep. Marilyn Stark, R-Bethany.

“Our state’s nonprofits do more with a dollar than any other group I know,” Stark said. “If they can keep more of their donations to better serve their clients, all of Oklahoma benefits. Let’s stop standing in their way and empower them to do what they do best.”

Last session, Stark introduced House Bill 1568, which would provide a sales tax exemption to nonprofit organizations with $3 million or less in annual gross revenue. Under the bill, alcohol and tobacco purchases are not considered exempt purchases.

Ellis told the subcommittee if United Way of Southwest Oklahoma could save on their sales tax, it would total less than $10,000, which would provide 40,000 meals through the Lawton Food Bank.

Lauren M. Corbut, vice president of external affairs at the Oklahoma Center for Nonprofits, spoke to members on the economics of nonprofit organizations. She said that about 6,500 Oklahoma-based nonprofits filed income with the Internal Revenue Services (IRS) last year, but those dollars aren’t stretching as far in the current economy.

“Although the total dollars fundraised are up, they’re not meeting with the rate of inflation,” Corbut told the House Appropriations and Budget Finance – Revenue and Taxation Subcommittee. “This means that multi-year grants don’t have the buying power that they used to.”

Corbut highlighted a recent internal survey of Oklahoma nonprofits, during which some organizations reported over half of their revenue going toward sales tax. Additionally, among Oklahoma’s nonprofits, data shows that of $6.9 billion given in grants, about $5.2 billion is directly returned to the state’s economy.

HB1568 passed the House 70-17 in March and is viable to be considered in the Senate next session, according to a press release.