Out of 51 U.S. jurisdictions, Colorado ranks #34 overall for its friendliness towards faith-based nonprofit organizations. Colorado has some policies 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 no RFRA.
Religious Freedom:
State Constitutional Protection of Free Exercise:
0
/5
The Colorado Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment.
State Religious Freedom Restoration Act:
-5
/5
Colorado has not enacted a RFRA and has enacted nondiscrimination laws that conflict with the beliefs of many religious organizations.
Religious Freedom for Nonprofits with Public Programming:
-3
/5
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.
Religious Freedom for Faith-Based Employers:
3
/5
Colorado’s nondiscrimination laws related to employment are broad but provide strong accommodations or exemptions to generally protect the autonomy of the vast majority of religious organizations.
Protections for Religious Exercise in State of Emergency:
-3
/5
Colorado law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Blaine Amendment:
-5
/5
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, but it could become effective in the future if Court precedent changes.
Regulatory Freedom:
Nonprofit Religious Corporation Act:
0
/5
Colorado’s nonprofit corporation law mentions the option for nonprofit corporations to incorporate for religious purposes. However, the law lacks both: (a) specific provisions to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs and (b) an option to incorporate expressly as a nonprofit religious corporation.
Standards of Conduct for Directors of Religious Organizations:
5
/5
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.
Charitable Registration Law:
0
/5
Colorado generally requires charitable solicitation registration and only exempts entities that are not required to file Form 990, such as organizations classified as churches, religious orders, etc.
Audit Requirements Pursuant to Charitable Registration:
5
/5
Colorado does not impose review or audit requirements as a condition of maintaining authorization to fundraise in the state.
Corporate Income Tax:
5
/5
Colorado imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status.
Sales and Use Tax, Sales:
-3
/5
Colorado imposes a sales and use tax on religious organizations’ sales and only provides limited exemptions for certain items.
Sales and Use Tax, Purchases:
3
/5
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.
Property Tax:
3
/5
Colorado imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes.
