If this column piqued your interest in North Carolina government’s approach to taxing tickets to entertainment events, you might be interested to learn that the General Assembly’s Revenue Laws Study Committee decided this morning to endorse a change to state law.

From the original column:

[L]awmakers preserved this year four of 14 exemptions that had been added to the sales tax rules over the years. Agricultural fairs, elementary and secondary school events, “youth athletic contests,” and programs from nonprofit groups that conduct no more than two events per year — neither of which lasts more than a week at a time — all maintain tax exemptions.

Confused yet? Just wait.

It was actually a new fifth exemption that generated the bulk of the discussion at the Oct. 8 meeting. The tax reform law now exempts “state attractions” from the sales tax. Lawmakers haggled over the rules detailing which groups, programs, or locations ought to be dubbed state attractions.

Here’s the change endorsed this morning after a meeting of a three-member subcommittee:

The subcommittee stated a desire that similar entertainment events should be taxed similarly and therefore recommends that the full committee consider retaining the exemption for events sponsored and held at elementary and secondary schools and repealing the other four exemptions.

The subcommittee expressed a concern about the administrative burdens of collecting and remitting the tax for very small nonprofit entities that do not have permanent staff. The subcommittee recommends a new exemption for an event sponsored by a nonprofit entity exempt from State income tax if all of the following conditions are met:

  • The entire proceeds of the activity are used exclusively for the entity’s nonprofit purposes.
  • The entity does not declare dividends, receive profits, or pay salary or other compensation to any members or employees.
  • The entity does not compensate any person for participating in the event, performing in the event, placing in the event, or producing the event.

Though the amendment won approval, some lawmakers still hope to see further changes. Rep. Becky Carney, D-Mecklenburg, noted her concerns about the potential impact on small nonprofit groups. Lawmakers expect to continue working on the rules in the months ahead.