A bill to establish a state sales tax exemption for the proceeds of fundraisers held by local veterans’ posts for active duty military personnel or veterans in need passed the Michigan Senate on Tuesday.
Sen. Mike Green, R-Mayville, introduced Senate Bill 209 after a fundraiser organized by the Richville American Legion post for Sgt. Travis Mills was subjected to the tax.
“Michigan ranks last in the nation for the per capita benefits received by its veterans, even though we have the 11th highest veteran population,” Green said. “Local veterans posts fill in the gaps and keep a lot of military folks, past and present, from falling through the cracks. This bill will ensure that not a penny of proceeds intended for heroes like Sergeant Mills ends up in state coffers.”
Current state law offers a limited sales tax exemption only to 501(c)(3) nonprofit groups. Local veterans’ posts affiliated with the Veterans of Foreign Wars, American Legion and AmVets are 501(c)(19) organizations and do not qualify for that exemption.
If signed into law, SB 209 will exempt up to $25,000 of the proceeds of such fundraisers from the sales tax. The exemption would apply to the sale of tangible goods — such as dinner tickets, baked goods or auctioned items — used to raise money for specified beneficiaries. Veterans posts will still pay sales tax on items they purchase and on the proceeds of other types of fundraisers and retail activity.
The measure passed the senate with broad bipartisan support and now moves to the House of Representatives for further consideration.