SB 9 — Charitable Organization State Sales & Use Tax

SecondSENATE RegularBILL Session26-009 Seventy-fifthBY GeneralSENATOR(S) AssemblyLindstedt STATEand OFSnyder, COLORADOKipp, REREVISEDAmabile, ThisCutter, VersionGonzales IncludesJ., AllJodeh, AmendmentsKolker, AdoptedMarchman, inMichaelson theJenet, SecondRoberts, HouseWallace, LLSWeissman, NO.Coleman;

26-0217.02also PierceREPRESENTATIVE(S) Lively x2059 SENATE BILL 26-009 SENATE SPONSORSHIP Lindstedt and Snyder, Kipp, Amabile, Coleman, Cutter, Gonzales J., Jodeh, Kolker, Marchman, Michaelson Jenet, Roberts, Wallace, Weissman HOUSE SPONSORSHIP McCluskie and Stewart R., Clifford, Duran, Nguyen, RutinelRutinel. e n m 2 E n 0 U U , O i i H a p Senate Committees House Committees R A Finance Finance r g i 26 A BILL FOR AN ACT E a 2 S R 1 C ONCERNING THE DETERMINATION OF WHETHER AN ENTITY IS A O d 3 H 2 r CHARITABLE ORGANIZATION FOR PURPOSES OF STATE SALES d a d M AND USE TAX .

eC mONCERNING ATHE BillDETERMINATION SummaryOF dWHETHER 6AN (Note:ENTITY IS A CHARITABLEORGANIZATIONFORPURPOSESOFSTATESALESANDUSE TAX .

This summary applies to this bill as introduced and does e 0 notreflectanyamendmentsthatmaybesubsequentlyadopted.Ifthisbill m 2 T n 0 passes third reading in the house of introduction, a bill summary that N g y applies to the reengrossed version of this bill will be available at E i a S e r http://leg.colorado.gov.) R e r F Charitable organizations are exempt from state sales and use tax.

Under current law, the definition of charitable organization for purposes of state sales and use tax includes criteria that mirror the federal e definitionofa501(c)(3)organization.Thebillrequiresthedepartmentto n 6 m 0 presume that an organization that presents the department with a T n , A U y E i a Shading denotes HOUSE amendment.

Double underlining denotes SENATE amendment.

S a r Capital letters or bold & italic numbers indicate new material to be added to existing law.R e Dashes through the words or numbers indicate deletions from existing law.

d F 501(c)(3) determination letter from the internal revenue service is a charitable organization for purposes of state sales and use tax.

(2.5) "Charitable organization" means any entity organized and operatedexclusivelyforreligious,charitable,scientific,testingforpublicoperated safety,exclusively literary,for orreligious, educationalcharitable, purposes,scientific, ortesting to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for thepublic preventionsafety,literary,oreducationalpurposes,ortofosternationalorinternational of________ crueltyCapital toletters children or animals,bold no& partitalic ofnumbers theindicate netnew earningsmaterial ofadded which inures to theexisting benefitlaw; of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidateforpublicoffice,oranyveterans'organizationregisteredunder section 501 (c)(19) of the federal "Internal Revenue Code of 1986", as amended.

Idashes DETERMININGthrough WHETHERwords ANor ORGANIZATIONnumbers QUALIFIESindicate ASdeletions Afrom CHARITABLEexisting ORGANIZATIONlaw ,and THEsuch DEPARTMENTmaterial OFis REVENUEnot SHALLpart PRESUMETHATANORGANIZATIONTHATPRESENTSTHEDEPARTMENTWITHof Athe 501(c)(3)DETERMINATIONact. LETTER FROM THE INTERNAL REVENUE SERVICE QUALIFIES AS A CHARITABLE ORGANIZATI.THE DEPARTMENT SHALL NOT PRESUME THAT AN ORGANIZATION DOES NOT QUALIFY AS A CHARITABLE ORGANIZATION BECAUSE OF A CHANGE IN THE -2- 009 ORGANIZATION S 501(c)(3STATUS .

OTHINGamateur INsports THIScompetition SUBSECTIO(2.5)(but PREVENTSTHEDEPARTMENTOFREVENUEFROMREVIEWINGWHETHERANonly ORGANIZATIONif QUALIFIESno ASpart Aof CHARITABLEits ORGANIZATIONactivities "involve FORthe PURPOSESprovisionofathleticfacilitiesorequipment),orforthepreventionofcruelty OFto THISchildren SUBSECTIO(2.5).or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office, or any veterans' organization registered under section 501 (c)(19) of the federal "Internal Revenue Code of 1986", as amended.

I N DETERMINING WHETHER AN ORGANIZATION QUALIFIES AS A CHARITABLE ORGANIZATION , THE DEPARTMENT OF REVENUE SHALL PRESUME THAT AN ORGANIZATION THAT PRESENTS THE DEPARTMENT WITH A 501(c)(3) DETERMINATION LETTER FROM THE INTERNAL REVENUE SERVICE QUALIFIES AS A CHARITABLE ORGANIZATION .

T HE DEPARTMENT SHALL NOT PRESUME THAT AN ORGANIZATION DOES NOT QUALIFY AS A CHARITABLE ORGANIZATION BECAUSEOFACHANGEINTHEORGANIZATION 'S501(c)(3)STATUS .N OTHING IN THIS SUBSECTION (2.5)PREVENTS THE DEPARTMENT OF REVENUE FROM REVIEWING WHETHER AN ORGANIZATION QUALIFIES AS A "CHARITABLE ORGANIZATION "FOR PURPOSES OF THIS SUBSECTION (2.5).

on the day following the expiration of the ninety-dayperiodafterfinaladjournmentofthegeneralassembly(Augustninety-dayperiod after final adjournment of the general assembly (August 12, 2026, if adjournment sine die is on May 13, 2026);

except that, if a referendumreferendumpetitionisfiledpursuanttosection1(3)ofarticleVofthestate petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approvedPAGE by2-SENATE theBILL people26-009 atapprovedbythepeopleatthegeneralelectiontobeheldinNovember2026 the general election to be held in November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.

-3-____________________________ 009____________________________ James Rashad Coleman, Sr.

Julie McCluskie PRESIDENT OF SPEAKER OF THE HOUSE THE SENATE OF REPRESENTATIVES ____________________________ ____________________________ Esther van Mourik Vanessa Reilly SECRETARY OF CHIEF CLERK OF THE HOUSE THE SENATE OF REPRESENTATIVES APPROVED________________________________________ (Date and Time) _________________________________________ Jared S.

Polis GOVERNOR OF THE STATE OF COLORADO PAGE 3-SENATE BILL 26-009