Rep. Steve Frisbie has moved forward with legislation aimed at updating Michigan’s sales tax exemptions for nonprofit fundraising activities. The measure, House Bill 5318, was advanced through the House Finance Committee and seeks to help schools, churches, hospitals, veterans organizations, and other nonprofits continue their community support efforts.
The bill proposes raising the current cap on sales tax exemption for fundraising sales of vehicles and personal property from $25,000 to $75,000. According to Frisbie, this change takes into account inflation and increased asset values that have impacted organizations dependent on fundraising.
“For many nonprofits and veterans organizations, fundraising is not optional — it is how they meet real needs,” said Frisbie. “This legislation updates an outdated limit so organizations serving students, patients, veterans, and local communities are not constrained by thresholds that no longer reflect today’s economy.”
During committee proceedings, Tim Paxson of the American Legion spoke in favor of the bill. He emphasized the importance of flexible fundraising rules for veterans service groups providing various forms of assistance throughout Michigan.
Under current law, qualifying nonprofits can exempt certain fundraising transactions from sales tax up to a $25,000 limit. The proposed legislation maintains this structure but increases the cap to reflect changes in market conditions—particularly when high-value items like vehicles are donated.
Frisbie clarified that House Bill 5318 does not introduce a new tax exemption but instead updates existing policy so that community and veterans groups can continue their work effectively.
The bill will now proceed for further review in the House Finance Committee.