A bipartisan plan introduced by state Rep. Steve Frisbie (R-Pennfield) to update and expand sales tax exemptions for charitable fundraising cleared the Michigan House Finance Committee on Tuesday.

House Bill 5318 would modernize Michigan’s charitable fundraising tax exemptions to reflect inflation and rising costs, helping schools, churches, hospitals, veteran groups, and nonprofit organizations raise more money to serve local communities.

“Fundraising events and charitable giving are about neighbors helping neighbors, but inflation has gotten in the way of that,” Frisbie said. “My bill ensures our tax code keeps up, so local organizations can focus on serving people instead of worrying about outdated limits.”

Under current law, only the first $10,000 of sales by certain charitable organizations are exempt from the sales tax, and vehicle purchases used for fundraising are capped at outdated dollar amounts. Frisbie said many charitable and veterans organizations throughout Michigan have struggled to purchase vehicles or equipment due to significant price increases in recent years.

His proposed solution would:

• Increase the aggregate sales tax exemption to $75,000 per fundraising event for schools, churches, hospitals, parent cooperative preschools, and nonprofits, provided the sales support their charitable purpose.

• Raise the single-event limit for veterans service organizations to $75,000 and tie that amount to inflation.

• Increase the maximum sales price for exempt personal property to $60,000 and for vehicles to $75,000 when used for fundraising or to obtain resources.

• Tie all exemption amounts to the Consumer Price Index to ensure they automatically adjust for inflation in future years.

The bill now advances to the full House of Representatives for consideration.