SB 26-9

Senate Bill 26-9, now signed into law in Colorado, simplifies the process for charitable organizations to prove their eligibility for state sales and use tax exemption. Instead of requiring additional documentation, the bill allows these organizations to provide a determination letter from the IRS stating they are a 501(c)(3) organization, which automatically qualifies them for the tax exemption. This affects all charities registered as 501(c)(3)s in Colorado, making it easier and more efficient for them to claim their tax benefits. Since the bill has been signed, these organizations can now use the IRS letter directly without needing further verification from the state.

Official Summary

Under existing law, charitable organizations are exempt from state sales and use tax. The definition of charitable organization for purposes of state sales and use tax includes criteria that mirror the federal definition of a 501(c)(3) organization. The act requires the department of revenue to presume that an organization that presents the department with a 501(c)(3) determination letter from the internal revenue service is a charitable organization for purposes of state sales and use tax.(Note: This summary applies to this bill as enacted.)

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