Committee Passes Bill to Protect Colorado Nonprofits from Federal Threats

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 Finance Committee today passed a bill, sponsored by Speaker Julie McCluskie and Rep. Rebekah Stewart, to protect Colorado nonprofits from hostile federal actions. SB26-009 passed by a vote of 8-3.

“Colorado nonprofits are a vital support for communities to protect reproductive rights, create affordable housing opportunities and preserve Colorado’s open spaces, but politically-motivated attacks threaten their ability to continue to serve our state,” said Speaker Julie McCluskie, D-Dillon. “This legislation protects nonprofits from attacks by ensuring that they continue to benefit from tax exemptions in our state, no matter what changes at the federal level.”

“Nonprofits generate over $60 billion a year to support vulnerable Colorado communities and support hundreds of thousands of jobs, which is especially important as the state grapples with a budget hole created by corporate tax cuts from H.R. 1,” said Rep. Rebekah Stewart, D-Lakewood. “Trump’s actions are rash and often in retaliation for those who do not blindly follow his political agenda. Our bill would protect good-paying jobs and ensure that nonprofits can continue to support Colorado communities.”

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 that call into question their budgetary futures and ability to serve their communities. SB26-009 is another in a host of actions 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.