SB 6349
In CommitteeSenate
Interscholastic programs/tax
Concerning tax exemptions for nonprofit organizations that manage interscholastic programs for public and private schools.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill makes it easier for nonprofits that manage interscholastic programs (like sports or academic competitions) for Washington’s public and private schools to avoid paying state business and occupation (B&O) and sales taxes on money they raise through events and membership fees — as long as the money is used solely to support those programs. It updates existing tax exemption rules to better fit how these groups operate today.
- Expands the definition of 'fund-raising activity' to include sponsorships, ticket sales, broadcasting rights, and coaching workshops for nonprofits that manage interscholastic programs, as long as all proceeds support the organization.
- Adds membership fees, assessments, or similar payments from schools to the definition of 'dues' for tax-exempt purposes for interscholastic nonprofits.
- Clarifies that income from fund-raising activities by qualifying nonprofits is exempt from sales tax and B&O tax, provided the funds are used solely for the organization’s mission.
- Maintains existing exemptions for libraries and other nonprofits, while updating definitions to better fit modern fundraising methods used by interscholastic program managers.
Who is affected
- Nonprofit organizations managing interscholastic programs — Nonprofit organizations that manage interscholastic programs (e.g., sports, music, academic competitions) for public and private schools in Washington will be able to exclude certain fundraising and membership-related income from state business and occupation (B&O) and sales taxes, as long as the funds are used solely to support the organization’s mission.
- Public and private schools — School districts and public/private schools that pay membership fees or assessments to these nonprofits will see clearer tax treatment for those payments, as they will now be classified as 'dues' under state tax law for exempt purposes.
- Other Washington nonprofits — Other nonprofits (e.g., libraries, general 501(c)(3) groups) continue to benefit from existing tax exemptions for fund-raising, but this bill clarifies and expands the definition of 'fund-raising activity' specifically for interscholastic program managers.
- Washington State Department of Revenue — The state’s Department of Revenue will apply updated rules to determine when income from interscholastic nonprofits is exempt from B&O and sales taxes, requiring updated guidance and possibly audits.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (4)
By exempting income from sponsorships, ticket sales, and membership fees from B&O and sales taxes, the bill allows interscholastic nonprofits to retain more of their fundraising revenue, directly supporting student programs like sports, music, and academic competitions — especially vital for schools in low-income districts that rely on external funding to sustain extracurriculars.
EducationPeopleRef: Sec. 1(3) & Sec. 2 (new language)Clarifying that membership fees and assessments from schools qualify as 'dues' reduces administrative ambiguity for both nonprofits and schools, lowering compliance costs and enabling schools to more confidently allocate funds to these programs without worrying about unintended tax implications.
Business & EmploymentPeopleRef: Sec. 2 (new language)Modernizing the definition of 'fund-raising activity' to include contemporary revenue streams (e.g., broadcasting rights, coaching workshops) helps interscholastic nonprofits adapt to evolving funding models and expand program offerings — particularly benefiting rural or under-resourced schools with fewer local fundraising options.
EducationPeopleRef: Sec. 1(3) (expansion of 'fund-raising activity' to include sponsorships, broadcasting rights, coaching workshops)The requirement that all exempted funds be used solely to support the nonprofit’s mission creates accountability and reduces the risk of misuse, helping ensure that tax-exempt revenue continues to serve educational and extracurricular goals rather than private gain.
Public SafetyPeopleRef: Sec. 1(2)(c) & Sec. 1(3) (proviso that all proceeds must be used solely to support the organization’s mission)
Potential Concerns (1)
The bill reduces state tax revenue by expanding exemptions for nonprofits managing interscholastic programs, which could lead to reduced public funding for K–12 education or other services over time — especially if the number of qualifying organizations or their fundraising grows significantly.
FinancialPeopleRef: Sec. 1(3) & Sec. 2 (new language)
Who Is Most Affected
Interscholastic nonprofits (e.g., WIAA, WSA, music/academic competition associations) gain significant financial relief — they can retain more of their fundraising revenue without paying B&O/sales taxes, strengthening their ability to sustain and grow programs. This is especially impactful for smaller or rural organizations with limited administrative budgets.
School districts and private schools benefit from clearer tax treatment of membership fees (now classified as 'dues'), reducing compliance risk and enabling more reliable budgeting for program contributions. Schools in high-poverty areas gain indirectly, as nonprofits can redirect saved tax dollars into student programming.
Students and families — especially those in low-income or rural communities — benefit from more stable and expanded extracurricular opportunities, as nonprofits can invest saved tax revenue into scholarships, equipment, travel, and coaching. This helps reduce participation barriers.
The Department of Revenue faces modest additional administrative burden to interpret and enforce the expanded exemptions, particularly distinguishing between exempt interscholastic fundraising and taxable commercial activity. However, the fiscal impact is minimal per the bill’s own estimate.
Other Washington nonprofits (e.g., libraries, general 501(c)(3)s) retain existing exemptions but gain little directly — the bill’s updates are narrowly tailored to interscholastic nonprofits and do not expand their benefits. Libraries, in particular, see no change to their existing treatment of used-book sales.