Out of 51 U.S. jurisdictions, Colorado ranks #32 overall for its friendliness towards faith-based nonprofit organizations. Colorado has several laws that facilitate the contributions of faith-based nonprofits, including an automatic exemption from state corporate income tax for religious organizations that have 501(c)(3) status, no audit requirement to solicit donations in the state, and strong protections for directors to rely on guidance from religious figures. Colorado, however, has some policies that are burdensome to faith-based nonprofits operating in the state, such as a broad Blaine Amendment and a lack of a RFRA.
The Colorado Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment (as currently interpreted by the US Supreme Court).
Colorado’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide accommodations or exemptions but only for only a narrow spectrum of religious organizations, such as organizations classified as churches.
Colorado’s nondiscrimination laws related to employment protect religious freedom by excluding religious organizations from the definition of “employer.”
The Colorado Constitution contains a Blaine Amendment that broadly restricts faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Current US Supreme Court precedent has rendered this language ineffective in many cases, but it could become effective in the future if Court precedent changes.
Colorado nonprofit corporation law does not have any law deferring to religious beliefs and structures in governance matters and does not have any special provisions specific to the internal governance or operations of religious organizations.
Colorado law permits a director to rely on guidance from religious figures within his or her faith tradition in the fulfillment of the director’s fiduciary duties.
Colorado charitable solicitation law contains exemptions only for entities that are not required to file Form 990, such as organizations classified as churches, religious orders, etc.
Colorado imposes a sales and use tax on religious organizations’ sales but a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ sales is generally available for organizations whose sales do not exceed a certain dollar amount per year.
Colorado imposes a sales and use tax but a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ purchases is generally available upon application.
Colorado imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes.
