Bill > S07880

This bill establishes a protective mechanism for tax-exempt organizations in New York state that have been potentially improperly designated as non-tax-exempt by the Internal Revenue Service (IRS). Specifically, any organization that was designated as a 501(c)(3) tax-exempt organization as of January 19, 2025, will automatically maintain its tax-exempt status for New York state purposes until January 1, 2026, or until the commissioner makes a determination. The bill creates a process for organizations to challenge their federal tax-exempt status revocation, allowing them to apply for a "state protected not-for-profit organization" designation. If approved, 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. Organizations can receive this designation by proving to the commissioner that the IRS improperly revoked their tax-exempt status, either through an application process or by providing a court ruling supporting their claim. The certification will be valid for up to one year, and the commissioner can establish a renewal process. The bill is designed to protect nonprofit organizations from potential arbitrary or improper federal tax-exempt status revocations and will be in effect from January 19, 2025, until January 20, 2029.

Budget and Finance, Government Affairs

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