Colorado § 39-26-718 - Charitable organizations - association or organization of parents and teachers of public school students.

§ 39-26-718. Charitable organizations - association or organization of parents and teachers of public school students.

(1) The following shall be exempt from taxation under the provisions of part 1 of this article 26:

(a) All sales made to charitable organizations, in the conduct of their regular charitable functions and activities;

(b) (I) All sales by a charitable organization of tangible personal property, commodities, or services otherwise subject to tax under this article 26 if:

(A) The net proceeds from sales by the charitable organizations of tangible personal property, commodities, or services otherwise subject to tax under this article 26 do not exceed forty-five thousand dollars during the preceding calendar year; and

(B) The funds raised by the charitable organization through these sales are retained by the organization to be used in the course of the organization's charitable service.

(II) The exemption in this subsection (1)(b) shall not apply to sales made by a charitable organization on and after the date that the net proceeds from sales by the charitable organization of tangible personal property, commodities, or services otherwise subject to tax under this article 26 exceeds forty-five thousand dollars during the current calendar year.

(c) On or after September 1, 2008, a sale by an association or organization of parents and teachers of public school students that is a charitable organization, if the association or organization uses the funds raised through the sale for the benefit of a public school or an organized public school activity or to pay the reasonable expenses of the association or organization.

(2) The storage, use, or consumption of any item that is exempt from sales tax by operation of subsection (1)(b) or (1)(c) of this section is exempt from taxation under the provisions of part 2 of this article 26.

Source: L. 2004: Entire part added with relocations, p. 1034, § 2, effective July 1. L. 2008: Entire section amended, p. 973, § 3, effective September 1. L. 2018: IP(1) and (1)(a) amended, (HB 18-1218), ch. 380, p. 2296, § 3, effective July 1. L. 2019: (1)(b) amended, (HB 19-1323), ch. 263, p. 2487, § 1, effective August 2. L. 2021: (2) added, (HB 21-1177), ch. 55, p. 229, § 4, effective September 7.

Editor's note: Subsection (1)(a) is similar to former § 39-26-114 (1)(a)(II), and subsection (1)(b) is similar to former § 39-26-114 (18), as they existed prior to 2004.

ANNOTATION

Annotator's note. Since § 39-26-718 is similar to § 39-26-114 and § 39-26-203 as they existed prior to their 2004 repeal and relocation to this part 7, relevant cases construing those provisions have been included in the annotations to this section.

Law reviews. For article, "State and Local Sales and Use Tax Exemptions for Colorado Charitable Organizations", see 29 Colo. Law. 55 (Aug. 2000).

The definition of "charitable organization" in a municipal tax code lends itself to two conflicting plain-meaning interpretations. In the first interpretation, in order to be eligible for a sales and use tax exemption, both religious and nonreligious charitable organizations must meet strict guidelines; in the second, a distinction is made between religious and charitable organizations, and the guidelines apply only to those organizations whose functions are nonreligious in nature. The court is obligated to support the first interpretation so as to avoid invoking a violation of the establishment clause of the federal constitution. Catholic Health Initiatives Colo. v. City of Pueblo, 207 P.3d 812 (Colo. 2009).

Tax incentives that inure only to the benefit of religious organizations solely by virtue of their religious nature violate the establishment clause. Catholic Health Initiatives Colo. v. City of Pueblo, 207 P.3d 812 (Colo. 2009).

A sales or use tax exemption for a charitable organization, whether religious or secular, must serve a broad, secular purpose. Catholic Health Initiatives Colo. v. City of Pueblo, 207 P.3d 812 (Colo. 2009).

Company purchases made for charitable functions exempt. Purchases made by a company in connection with its charitable functions and activities, regardless of the nature of its ordinary business, are exempt from the operation of this article. Bedford v. Colo. Fuel & Iron Corp., 102 Colo. 538, 81 P.2d 752 (1938).

Only purchases used in regular charitable activities. Only those purchases by charitable organizations which are for use in the conduct of their regular charitable functions and activities are exempt from the sales and use tax. Sec. Life & Accident Co. v. Heckers, 177 Colo. 455, 495 P.2d 225 (1972).

Purchases by charitable organizations for use in charitable functions exempt. Those purchases by charitable organizations which are for use in the conduct of their regular charitable functions and activities are exempt from the sales and use tax. Sec. Life & Accident Co. v. Heckers, 177 Colo. 455, 495 P.2d 225 (1972).

Fraternal benevolent societies are not exempt from sales taxes that were not contemplated in 1911 when they were declared to be "charitable and benevolent institution[s]" when such sales tax was first adopted in 1935 and the legislature imposed the tax on "all sales and purchases of tangible personal property at retail". This is particularly true if the legislation that created the tax listed specific exemptions that did not include fraternal benevolent societies. Colo. Dept. of Rev. v. Woodmen of the World, 919 P.2d 806 (Colo. 1996).

The reintroduction of the words "and every" to a phrase making it read "all and every state tax" does not strengthen and reaffirm the broad scope of the exemption for fraternal benefit societies, it merely was replaced after being determined by the revisor of statutes to be redundant. The meaning of the phrase remains unchanged. Colo. Dept. of Rev. v. Woodmen of the World, 919 P.2d 806 (Colo. 1996).

Applied in First Lutheran Mission v. Dept. of Rev., 44 Colo. App. 417, 613 P.2d 351 (1980).