This state does not have a corporate franchise tax.
The following guidelines provide background information on the most common types of filings and the related exemptions in Colorado.
Colorado exempts religious entities from registering as a charity if they are not required to file a Form 990 under 26 U.S.C. § 6033(a)(3)(A)(i) or (iii), which includes churches, the religious activity of religious orders, and religious organizations as described in IRC Sec. 501(c)(3). (CRS 6-16-104(6)(a).) Religious entities that file a Form 990 must generally register as a charity in Colorado.
Charities that do not satisfy one of the above exemptions may still be exempt if they do not raise or receive gross revenue in excess of $25,000.00 a year from sources other than governmental entities or organizations exempt under IRC Sec. 501(c)(3), or if they do not receive contributions from more than 10 individuals in a year. This exemption does not apply if the organization has contracted with a paid solicitor to solicit contributions in Colorado. (CRS 6-16-104(c).).
Foreign entities not subject to one of the above exemptions that have interactive websites targeting persons in Colorado, or that receive “repeated and ongoing” contributions or “substantial” contributions from Colorado residents through their websites must register. An entity receives contributions on a “repeated and ongoing” basis if it receives at least 50 online contributions during a fiscal year. An entity receives “substantial” contributions if it receives the lesser of: (1) $25,000, or (2) 1% of its total contributions in online contributions during a fiscal year.*
Some states require organizations to appoint a “registered agent” in the state as part of the organization’s charitable registration. This state does not currently have this requirement as part of the charitable registration process itself. A registered agent, however, is required as part of an organization’s business registration described below.
This state does not require organizations to post specific language when conducting charitable solicitations unless the organization is working with a paid solicitor. Required disclosures are summarized in a link provided in the “Helpful Links” section.
Optional (required if working with paid solicitor) - COLORADO RESIDENTS MAY OBTAIN COPIES OF REGISTRATION AND FINANCIAL DOCUMENTS
FROM THE SECRETARY OF STATE’S OFFICE AT http://www.sos.state.co.us OR 303-894- 2200. REGISTRATION BY THE SECRETARY OF STATE IS NOT AN ENDORSEMENT OF EITHER THE PAID SOLICITOR OR THE ORGANIZATION OR CAUSE THE SOLICITOR REPRESENTS.
Commercial co-venturers are subject to disclosure requirements if they reasonably believe that 50% or more of all proceeds from a charitable sale will be derived from Colorado. Required disclosures are summarized in a link provided in the “Helpful Links” section.
If an entity is not exempt from registering as a charity, then it must also register with the Colorado Secretary of State as a business before the organization can complete its charitable solicitation registration. Such organizations are required to maintain a registered agent in Colorado.
In this state, organizations that have received recognition of federal income tax exemption, including under IRC Sec. 501(c)(3) are automatically exempt from state income tax. Some organizations may choose to send a copy of their IRS determination letter to the state department of revenue to indicate the organization’s position that it qualifies for the exemption. Although an organization may be exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI will be subject to Colorado’s income tax.
Colorado generally exempts organizations that have received recognition of federal income tax exemption under IRC Sec. 501(c)(3) from sales and use, and property taxes. More information regarding sales and use and property tax exemptions are available at the Colorado Department of Revenue website and the Colorado Department of Local Affairs website. An accountant or attorney can provide specific answers to questions regarding your organization’s eligibility for these exemptions
True Name Availability Search: https://www.sos.state.co.us/biz/TrueNameAvailCriteria.do?transTyp=AUTH ORITY
Online Charity Registration: https://www.sos.state.co.us/pubs/charities/charitableHome.html
Online Business Registration (Including Foreign Entities): https://www.sos.state.co.us/pubs/business/fileAForm.html
Disclosure Requirements: https://www.sos.state.co.us/pubs/charities/FAQ/disclosure.html#
Colorado Sales Tax Exemption: https://tax.colorado.gov/charities-nonprofits
Colorado Corporate Income Tax Guide: https://www.colorado.gov/pacific/sites/default/files/01.2020_CorporateIn co meTaxGuide.pdf
This resource contains general educational information related to legal concepts, but this information does not constitute legal advice. Anyone seeking legal advice is strongly encouraged to consult with a licensed attorney regarding any of the matters discussed herein. Although licensed attorneys work with Napa Legal, Napa Legal is not a law firm and does not undertake legal representation on behalf of any clients. Further, no licensed attorney working with or on behalf of Napa Legal agrees to undertake legal representation on behalf of any client unless the terms of such representation are set forth in a separate, written representation agreement.