Public Policy Articles & Analysis

Nonprofit tax exemption is essential for all North Carolinians.

North Carolina nonprofits are presently exempt from virtually all state and local taxes, except for state sales tax.  It is important to maintain documentation detailing your organizations tax-exempt status, such as its letter of determination from the IRS, at all times.  If your letter of determination has been misplaced or otherwise lost, you may easily 

Unemployment insurance is an important part of the social safety net that helps workers who have been laid off or terminated without cause to transition into new jobs by providing them with limited, temporary financial assistance. The Division of Employment Security at the NC Department of Commerce manages North Carolina’s unemployment system.

Here is some basic information about how the state’s unemployment system affects nonprofits.

At the Center’s recommendation, both the House and Senate included a provision in their regulatory reform bills that could save money for many small nonprofits with fewer than three employees. Under state law, any employer with three or more employees is required to purchase workers’ compensation insurance. The definition of “employee” in the current law includes nonprofit board officers, meaning that small nonprofits with three or more board officers (i.e. almost all nonprofits) are required to take on an often unnecessary expense.

In 2011, the N.C. House of Representatives overwhelmingly passed H.B. 886, which would bring the North Carolina corporate tax deduction for charitable contributions into conformance with federal law. This would help more small businesses contribute to nonprofits. The N.C. Center for Nonprofits encourages the N.C. Senate to pass this bill during the 2012 short session.

An Essential Role for Nonprofits

Why should your nonprofit get involved?

1. It strengthens your nonprofit’s voice.  Elected officials know who votes.  They pay less attention to communities with low voter turnout.
2. People trust nonprofits.  The people served by your nonprofit are more likely to listen to information from you than from any other source.  If your nonprofit doesn’t provide them with information about where, when, and why to vote, then they probably won’t sho

The N.C. General Assembly is considering a bill (H.B. 482) that would create new penalties for nonprofits and businesses that improperly classify their workers as independent contractors rather than employees. Nonprofits that misclassify their employees and fail to provide benefits such as workers’ compensation or unemployment insurance benefits could face fines ($1,000 per misclassified worker) and could be barred from state contracts for five years.

The General Assembly is in the final stages of its efforts to restructure North Carolina's tax system.  The House and Senate are considering different version of legislation (H.B. 998) to lower tax rates and simplify the state tax system. It is essential that tax reform not harm nonprofits. Specifically:

A bill (S.362) filed in the NC Senate would create a new annual filing requirement for nonprofits that are incorporated in North Carolina. Main requirements of the bill include:

The Status (and Future) of the Overtime Rule

What Nonprofits Need to Know

In November 2016, a judge from a federal court in Texas issued a temporary injunction that delayed the December 1 effective date for the new overtime rule from the U.S. Department of Labor (DOL). On December 1, 2016 DOL and the U.S.

Congress Makes Charitable Giving Incentives Permanent

Leaders in Congress have reached agreement on an historic bipartisan agreement on a tax bill that will have real impact on the work of charitable nonprofits.  The Protecting Americans from Tax Hikes Act of 2015 or PATH Act, which was part of the omnibus budget (HR 2029), permanently extends three charitable giving incentives: