Bill to Protect Colorado Nonprofits from Federal Threats Passes

SB26-009 would allow Colorado nonprofits that have had their federal tax-exempt status revoked for political reasons to maintain their exemption from state sales tax

DENVER, CO – The House today passed a bill, sponsored by Speaker Julie McCluskie and Representative Rebekah Stewart, to protect Colorado nonprofits from hostile federal actions. SB26-009 passed by a vote of 43-21.

“We’re protecting Colorado nonprofits that have helped deliver affordable housing, protect Colorado’s open spaces and provide food assistance for working families,” said Speaker Julie McCluskie, D-Dillon. “Trump has already targeted Colorado. If he continues to attack community-driven support that goes against his agenda, like Planned Parenthood, family resource centers and immigration advocates, Colorado’s most vulnerable will suffer. Colorado nonprofits have been a lifeline to our communities, and our bill ensures that nonprofits can still qualify for state tax exemptions if they face political attacks from the White House.”

“Trump’s H.R. 1 slashed our budget to fund corporate tax breaks, meaning that our communities will soon rely more on support from nonprofits,” said Rep. Rebekah Stewart, D-Lakewood. “The federal government has threatened to revoke nonprofit status for reasons completely unrelated to compliance with tax law because the White House does not agree with the missions of certain organizations. By defending nonprofits from politically-motivated threats, we will protect over $60 billion a year in support for hardworking Coloradans.”

SB26-009 would ensure that valid 501(c)(3) organizations maintain their state tax exemption, even if the federal government removes their federal tax-exempt status for political reasons. It would also ensure that the state maintains its authority to deny tax exemption for organizations that have lost their federal nonprofit status for legitimate reasons. 

Over the past year, Colorado nonprofits have increasingly struggled to navigate frenzied federal actions so they can continue to serve their communities. SB26-009 is another step Colorado Democrats have taken to protect Coloradans’ way of life amid federal threats.

In 2021, Colorado nonprofits generated over $62 billion in total economic output and supported over 262,000 jobs, including 182,000 jobs through direct employment.