The Center is developing plans to advocate for legislators to include a nonprofit relief fund in the next state COVID-19 response package. Your input is essential in coming up with a plan to provide meaningful relief for nonprofits. Specifically, it would be helpful to know what type of economic hardships your nonprofit has experienced due to COVID-19, so a grant program can have appropriate eligibility criteria. Examples of possible criteria could include:

Let us know what type of eligibility criteria for a nonprofit relief fund would make the most sense for your nonprofit. Thank you if your nonprofit has already provided input.

The NC General Assembly could soon consider six legislative proposals to help nonprofits save time and money and allow nonprofit boards and members to take actions more easily. These proposals include:

A bill (S.717) filed in the NC Senate yesterday would place a constitutional amendment on the November 2022 ballot to limit the growth of state spending. The proposed constitutional amendment, known as the Taxpayer Bill of Rights or TABOR, would make several changes:

In the past, the Center has opposed similar proposals to create a TABOR constitutional amendment in North Carolina. If enacted, TABOR would limit the ability of state and local governments to pay for services provided by nonprofits, while at the same time relying on nonprofits to provide more public services that governments can no longer afford to offer. Colorado is the only state that has fully implemented a version of TABOR. According to the Colorado Nonprofit Association: “TABOR has undermined the ability of Colorado nonprofits to meet current demands for services and respond to future changes in economic conditions, population growth, and the costs of delivering public services.”

To become law, the constitutional amendment would need to pass both the House and Senate by 60% super-majority votes (meaning it would need bipartisan support). If legislators approve it, a majority of voters would need to vote in favor of it on the November 2022 ballot. Unlike most bills, the Governor cannot veto constitutional amendments (and does not need to sign them into law).

Two weeks ago, the IRS issued guidance for employers on how to calculate and claim the Employee Retention Tax Credit (ERTC) for the first two calendar quarters of 2021. The revisions to previous guidance are needed due to improvements in the law enacted in the year-end COVID relief law. The guidance explains the increase in the maximum credit amount – up to $7,000 per employee per quarter – and changes to the gross-receipts test and definition of qualified wages, among other issues. The IRS announced that it will be issuing additional guidance covering the third and fourth calendar quarters of 2021 that will reflect additional changes to the ERTC enacted as part of the American Rescue Plan Act.

The ERTC is a refundable tax credit (translation: nonprofits are eligible for it) that organizations can take if:

The National Council of Nonprofits has an excellent analysis of the ways the ERTC could help nonprofits.

Yesterday, the NC House of Representatives gave preliminary approval to a bill (H.B. 334) to ensure that North Carolina businesses do not have to pay state income tax on the forgivable amounts of their PPP loans. Nonprofits are generally exempt from paying state corporate income tax but some organizations pay state tax on unrelated business income. Based on the Center’s analysis, the forgivable portion of PPP loans should generally not be taxable for charitable nonprofits, but this bill would provide greater certainty to nonprofits that received PPP loans. The House will take a final vote on the bill next week, and then the Senate would need to approve it before it goes to Governor Roy Cooper for his signature.

Yesterday, the Internal Revenue Service (IRS) issued guidance explaining that most people experiencing homelessness are eligible for $1,400 Economic Impact Payments – or stimulus payments – from the American Rescue Plan Act and $600 stimulus payments from the December COVID relief legislation. The IRS guidance explains that people can file tax forms to receive their stimulus payments – and the earned income tax credit – even if they don’t have a permanent address or a bank account. The Center strongly encourages nonprofits to help spread the word and help people experiencing homelessness in their communities to get this important economic relief. 

Bills introduced in the NC Senate (S.716) and NC House of Representatives (H.B. 542) this week would make a variety of changes to state election and governmental ethics laws that would help nonprofits. These changes include:

While it is unlikely that either bill will be considered this session, it is possible that legislators could include some parts of the bills in other legislation later this year.

First quarter lobbying expense reports are due to the NC Secretary of State by Wednesday, April 21. Nonprofits that are registered as lobbyist principals and nonprofit staff and contractors registered as lobbyists must submit their expense reports each quarter. For more information on lobbying registration and reporting requirements, check out the Center's summary of NC lobbying laws for nonprofits.

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