Marnie's Mission Minute: Nonprofit Sales Tax Exemption Will Have Its Day

Just like oil & gas, banking, health care and other industries, the nonprofit sector follows bills each legislative session that we either support or oppose based on how they may affect the nonprofits we serve. At the Oklahoma Center for Nonprofits, advocacy is one of our chief functions, and we take positions on those matters that may reasonably affect all nonprofits in the state (rather than focusing more narrowly on bills affecting, for example, housing, social services, animal rescue, or other subsectors).

For the last few years – and again in 2026 via HB 1171 – one of those bills has been a universal sales tax exemption for nonprofits with gross annual revenue of up to $3 million, authored by Rep. Marilyn Stark (R-Bethany). This bill would have helped level the playing field for our state’s smaller nonprofits, offering them a bit of relief in these days of economic uncertainty, skyrocketing inflation and a massive shift in America’s nonprofit funding environment.

I find many Oklahomans might not realize that nonprofit “tax exempt” status relates only to federal income tax, and that there is no guarantee for any other nonprofit tax exemptions. At least half of U.S. states report some form of tax exemption at the state level, and I do believe that it is time for Oklahoma to hop onboard this train, especially since we are a state of such great need that has experienced cuts to support services elsewhere.

Rep. Stark has studied this issue and championed it for several years now. She would be the first to tell you that she is inspired by her personal experience on the frontlines serving Oklahomans for years as a nurse and later as a nonprofit leader, stretching every dollar to maximize impact toward her mission.

Unfortunately, this bill failed to get on the agenda in its assigned committee this session because, while its impact on the state budget is low compared to the impact it could have on Oklahoma nonprofits, it was not revenue-neutral during a time focused on cutting costs.

Other sales tax exemptions and bills with new fiscal impacts made it on the chopping block similarly, so the nonprofit sales tax exemption was not singled out. However, on this specific matter, I think there is an opportunity here for some vision for the future.

We’ve heard for years about the potential merits of tax cuts for businesses freeing up dollars to help support those businesses’ employee salaries, vendor payments and more.

While I am not taking a position on any other tax matters outside the nonprofit realm, I might suggest that the same logic could apply to the nonprofit sector: a sales tax exemption could incrementally – by just a few cents on the dollar – help support nonprofits making payroll, paying their bills and, importantly, pouring back into their missions, which give back to the Oklahomans in our communities.

We greatly appreciate Rep. Stark for her advocacy for the nonprofit sector and will continue to work with her and many others in our state government to help make sure Oklahoma is a great place to do business for nonprofits.