June 17, 2015; WRAL (Raleigh-Durham, NC)

Nonprofit leaders in North Carolina are gearing up an advocacy effort to hold off proposed harmful changes to the state’s tax code.

Hospitals, YMCAs, churches and other nonprofits say they would not be able to serve as many people if two key changes pass through the North Carolina state senate, according to Raleigh-Durham’s WRAL-TV.

Currently, charities can claim up to $45 million in state and local sales tax refunds per year. The proposed budget would reduce that to $1 million per year, the amount of refund on $15 million in purchases.

Proponents of the change say it would mainly affect larger nonprofits such as hospitals and private universities, which they point out, are large businesses that can afford it. Critics counter that mid-sized nonprofits would also be affected; one example would be small churches building bigger buildings because they can claim a sales tax refund on the supplies.

Another proposal would cap the state’s unlimited charitable contribution tax deduction at $20,000 per year. Again, opponents said that would cut down on the number of charitable gifts made by individuals. Together, as nonprofit leaders who gathered at the state capital told WRAL-TV, the two changes would add to their costs and hurt their fundraising.

State house leaders are not inclined to go along with the changes, pointing out that “the role that nonprofits play in the state reduces the size of state government.”—Larry Kaplan