Income Tax Check-off Nonprofit Donation Fund
Section 1 of the bill creates the donate to a Colorado nonprofit fund (fund) in the state treasury. A voluntary contribution designation line for the fund will appear on the state individual income tax return form in the first income tax year:
- In which the department of revenue (department) has received sufficient funding to implement the program;
- That begins on or after January 1, 2019; and
- That begins after a space becomes available and the fund is next in the queue.
If the space for the fund becomes available before all three conditions are met, the bill requires the department to hold the space for the fund until all three conditions are met, and to include the line thereafter. The line will allow a taxpayer receiving a refund to designate a contribution to an eligible charitable organization (eligible organization) of their choice.
The bill requires the secretary of state to provide a list of eligible organizations. To be eligible, an organization must be registered and in good standing with the secretary under the 'Colorado Charitable Solicitations Act' and be a nonprofit that is tax exempt under section 501 (c)(3) of the internal revenue code. A charity may request to exclude itself from the list. The department will make the list of eligible organizations available to the public and a taxpayer may choose a single charity from the list to receive the contribution through the fund.
Once the fund is placed on the form, the department is directed to determine annually the total amount designated to the fund, and the total amounts designated to each eligible organization, and to report those amounts to the state treasurer and the general assembly. The state treasurer is required to credit the total amount to the fund. The bill requires the general assembly to appropriate from the fund to the department, the secretary of state, and the state treasurer their actual, reasonable costs for implementing the fund.
After the appropriations for the administration of the fund are deducted, the state treasurer is required to distribute the contributions to the charities as designated by taxpayers after a reduction proportionate to the amount deducted from the fund for administration. The department is not liable to a taxpayer or charity for an error in distributing a contribution.
The fund is repealed if the department does not raise sufficient funding to implement the program through gifts, grants, and donations by September 30, 2020.
Section 2 excludes the fund from the time limitations and minimum contribution requirements imposed on voluntary contribution funds. It also adds a limitation that a taxpayer cannot contribute to any voluntary contribution fund or combination of voluntary contribution funds in an amount that exceeds the amount of the taxpayer's refund.
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)