Bill > S07880

This bill creates a mechanism for organizations with federal 501(c)(3) tax-exempt status as of January 19, 2025, to automatically maintain their tax-exempt status in New York state, even if their federal tax-exempt status is revoked. The bill, nicknamed the NY-PROTECT ACT, establishes a process where organizations can apply to the state commissioner to be designated as a "state protected not-for-profit organization" if they believe their federal tax-exempt status was improperly revoked. Organizations can qualify by demonstrating to the commissioner that they meet the requirements for tax-exempt status, or by providing a court ruling suggesting the Internal Revenue Service (IRS) acted illegally in revoking their status. Once designated, these organizations will be treated as tax-exempt for all state and local purposes, including taxes, contracts, grants, and other programs, regardless of their federal status. The certification is initially valid for up to one year, and the commissioner can establish a renewal process. The bill is temporary, taking effect on January 19, 2025, and expiring on January 20, 2029, effectively protecting organizations' state-level tax-exempt status during this period.

Government Affairs

https://www.nysenate.gov/legislation/bills/2025/S7880