NY State Senate Bill 2025-S7880

Senate Bill S7880

2025-2026 Legislative Session

Enacts the New York Preventing Revocation of Organizations' Tax-Exempt Classifications by Trump Act (NY-PROTECT ACT); repealer

download bill text pdf

Current Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 13, 2025	referred to investigations and government operations

2025-S7880 (ACTIVE) - Details

See Assembly Version of this Bill:: A8583
Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Add §27-a, Tax L

2025-S7880 (ACTIVE) - Summary

Allows an organization included on the federal list of tax-exempt organizations under section 501(c)(3) of title 26 of the United States code on March first, two thousand twenty-five to automatically maintain their tax-exempt status for New York state purposes; provides for the repeal of such provisions upon the expiration thereof.

2025-S7880 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S7880

SPONSOR: KRUEGER
 
TITLE OF BILL:

An act to amend the tax law, in relation to enacting the "New York
Preventing Revocation of Organizations' Tax-Exempt Classifications by
Trump Act" or the "NY-PROTECT ACT"; and providing for the repeal of such
provisions upon expiration thereof

 
PURPOSE:

The NY-PROTECT Act will ensure that 501(c)3 organizations that lose
tax-exempt status as a result of an illegal or improper revocation by
the IRS can continue operating in New York as if it maintained such
status.

 
SUMMARY OF PROVISIONS:

Section 1: titles the bill the "New York Preventing Revocation of Organ-
izations' Tax-Exempt Classifications by Trump Act" or the "NY-PROTECT
Act"

Section 2: Creates a new Section 27-A of the tax law to develop a proc-
ess within the Department of Tax and Finance to allow organizations that
held tax-exempt status on January 19, 2025, to continue operating with
tax-exempt status in New York if the Internal Revenue Service, under
President Trump, revokes their 501(c)3 status.

The Commissioner of Tax and Finance will create an application for
organizations that lose their tax-exempt status to become a 'state
protected not-for-profit organization'. This designation will remain in
effect until the earlier of (i) April 15th following the year that tax
and finance issues 'state protected not-for-profit organization' status
or (ii) one year after the IRS restores the organization's Federal tax-
exempt status.

Section 3: This act shall take effect immediately and shall be deemed to
have been in full force and effect on and after January 19, 2025, and
shall expire and be deemed repealed January 20, 2029.

 
JUSTIFICATION:

It is critically important to protect nonprofits that have or that may
be targeted by the federal government by means of an illegal or improper
revocation of that group's 501(c)(3) status by the IRS as recently has
been threatened by the President of the United States and senior federal
officials. Organizations such as colleges, climate or environmental
groups, and civil rights organizations are doing critical work in New
York communities and losing 501(c)3 designation would have far reaching
impacts. A 501(c)3 organization, whose status is illegally or improperly
revoked by the IRS, may be concomitantly subjected to an array of state
or local taxes. Further, a 501(c)3 designation provides more than just a
status for taxing purposes. This status, and a certification of such
status, is required by an myriad of programs, contracts and qualifica-
tions under New York State education law, housing law, health law, ag &
markets law and other areas in connection with the state and local
governments.

The NY PROTECT Act will ensure that no services or contracts are inter-
rupted as a result of federal actions that are illegal of improper.

 
LEGISLATIVE HISTORY:

2025: New Bill

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately and shall be deemed to have been
in full force and effect on and after January 19, 2025, and shall expire
and be deemed repealed January 20, 2029.

2025-S7880 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7880
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               May 13, 2025
                                ___________
 
 Introduced  by  Sen. KRUEGER -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment Operations
 
 AN ACT to amend the tax law, in  relation  to  enacting  the  "New  York
   Preventing  Revocation of Organizations' Tax-Exempt Classifications by
   Trump Act" or the "NY-PROTECT ACT"; and providing for  the  repeal  of
   such provisions upon expiration thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. This act shall be known and may be cited as the  "New  York
 Preventing  Revocation  of  Organizations' Tax-Exempt Classifications by
 Trump Act" or the "NY-PROTECT ACT".
   § 2. The tax law is amended by adding a new section 27-a  to  read  as
 follows:
   §  27-A. IMPROPER SUSPENSION OF TAX-EXEMPT STATUS BY THE UNITED STATES
 INTERNAL REVENUE SERVICE. 1. NOTWITHSTANDING ANY  STATE  OR  LOCAL  LAW,
 EVERY  ORGANIZATION  DESIGNATED  BY  THE INTERNAL REVENUE SERVICE OF THE
 UNITED STATES UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE AS  A
 TAX-EXEMPT ORGANIZATION  AS OF JANUARY NINETEENTH, TWO THOUSAND  TWENTY-
 FIVE  SHALL  AUTOMATICALLY MAINTAIN THEIR TAX-EXEMPT STATUS FOR NEW YORK
 STATE PURPOSES UNTIL THE EARLIER OF: (A) A DETERMINATION BY THE  COMMIS-
 SIONER  PURSUANT  TO  AN APPLICATION AS PROVIDED BY THIS SECTION; OR (B)
 JANUARY FIRST, TWO THOUSAND TWENTY-SIX.
   2. (A) WITHIN NINETY DAYS OF THE EFFECTIVE DATE OF THIS  SECTION,  THE
 COMMISSIONER  SHALL  ESTABLISH  A  PROCEDURE  OR APPLICATION ALLOWING AN
 ORGANIZATION THAT BELIEVES  THAT  THE  UNITED  STATES  INTERNAL  REVENUE
 SERVICE  ILLEGALLY OR IMPROPERLY REVOKED ITS DESIGNATION AS A TAX-EXEMPT
 ORGANIZATION UNDER SECTION 501(C)(3) OF THE  INTERNAL  REVENUE  CODE  TO
 ESTABLISH  TO THE SATISFACTION OF THE COMMISSIONER THAT THE ORGANIZATION
 MEETS THE REQUIREMENTS OF THAT SECTION WITHOUT REGARD TO SUCH REVOCATION
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11734-02-5
 S. 7880                             2

 
 OR FEDERAL STATUS. THE COMMISSIONER SHALL DESIGNATE SUCH ORGANIZATION AS
 A "STATE PROTECTED NOT-FOR-PROFIT ORGANIZATION" UPON SUCH SATISFACTION.
   (B)  THE COMMISSIONER SHALL AUTOMATICALLY DESIGNATE AN ORGANIZATION AS
 A "STATE PROTECTED  NOT-FOR-PROFIT  ORGANIZATION"  IF  THE  ORGANIZATION
 PROVIDES  TO  THE COMMISSIONER A COPY OF A FEDERAL OR STATE COURT RULING
 IN EFFECT HOLDING THAT THE UNITED STATES INTERNAL REVENUE SERVICE  ACTED
 OR  LIKELY  ACTED ILLEGALLY WHEN IT REVOKED THE TAX-EXEMPT STATUS OF THE
 ORGANIZATION, REGARDLESS OF WHETHER THE UNITED STATES  INTERNAL  REVENUE
 SERVICE HAS COMPLIED WITH OR IS APPEALING SUCH RULING.
   3.  AN  ORGANIZATION  WHOSE  REQUEST  TO  BE  DESIGNATED  AS  A "STATE
 PROTECTED NOT-FOR-PROFIT ORGANIZATION" IS  DENIED  BY  THE  COMMISSIONER
 SHALL  HAVE  THE  RIGHT  TO APPEAL THE DETERMINATION USING THE PROCEDURE
 PRESCRIBED BY ARTICLE FORTY OF  THIS  CHAPTER  OR  OTHERWISE  PRESCRIBED
 PURSUANT  TO  THIS  CHAPTER, AND MUST, IN SUCH PROCEEDING, CHALLENGE THE
 MERITS OF THE DETERMINATION MADE BY THE UNITED STATES  INTERNAL  REVENUE
 SERVICE.
   4.  A "STATE PROTECTED NOT-FOR-PROFIT ORGANIZATION" SHALL MAINTAIN ITS
 TAX-EXEMPT STATUS UNDER NEW YORK STATE AND LOCAL LAW WITHOUT  REGARD  TO
 THE  CHANGE  IN  ITS FEDERAL STATUS. IT SHALL, NOTWITHSTANDING ANY OTHER
 STATE OR LOCAL LAW OR RULE, BE TREATED AS IF  IT  WERE  AN  ORGANIZATION
 DESIGNATED  AS  A  501(C)(3)  ORGANIZATION BY THE UNITED STATES INTERNAL
 REVENUE SERVICE IN RESPECT TO ANY TAX, FEE OR OTHER IMPOSITION  ADMINIS-
 TERED  BY  THE  COMMISSIONER;  AND  IN  RESPECT TO ANY SALE, TRANSFER OR
 ASSIGNMENT; AND IN RESPECT TO ANY TAX, FEE OR OTHER IMPOSITION  ADMINIS-
 TERED  BY  A  LOCAL  GOVERNMENT;  AND IN RESPECT TO ANY CONTRACT, GRANT,
 BENEFIT, LICENSE, OBLIGATION, QUALIFICATION, PROCEDURE OR PROGRAM ESTAB-
 LISHED OR OPERATED BY OR WITH THE STATE OR A LOCAL GOVERNMENT, INCLUSIVE
 OF ANY AGENCY, AUTHORITY OR SUBDIVISION THEREOF.
   5. (A) THE COMMISSIONER SHALL PROVIDE A DETERMINATION TO AN  ORGANIZA-
 TION  SATISFYING  THE  REQUIREMENTS  IMPOSED  BY SUBDIVISION TWO OF THIS
 SECTION WITH RESPECT TO A CERTIFICATION OF ITS DESIGNATION AS  A  "STATE
 PROTECTED  NOT-FOR-PROFIT ORGANIZATION" WITHIN THIRTY DAYS OF RECEIPT OF
 A COMPLETED APPLICATION.
   (B) NOTWITHSTANDING ANY STATE OR LOCAL  LAW,  RULE  OR  REGULATION  OR
 PROCEDURE,  THIS CERTIFICATION SHALL BE ACCEPTED IN LIEU OF ANY REQUIRE-
 MENT THAT AN ORGANIZATION PROVIDE DOCUMENTATION, OR OTHERWISE CERTIFY OR
 AFFIRM, THAT IT IS AN ORGANIZATION EXEMPT FROM  TAXATION  UNDER  SECTION
 501(C)(3) OF THE INTERNAL REVENUE CODE.
   (C)  THE  CERTIFICATION  SHALL  REMAIN  IN EFFECT UNTIL THE EARLIER OF
 EITHER APRIL FIFTEENTH OF  THE  YEAR  FOLLOWING  THE  ISSUANCE  OF  SUCH
 CERTIFICATE,  OR ONE YEAR AFTER THE DATE THAT THE UNITED STATES INTERNAL
 REVENUE SERVICE RESTORES THE DESIGNATION OF THE ORGANIZATION AS  TAX-EX-
 EMPT;  PROVIDED  THAT  THE  COMMISSIONER  MAY REVOKE THE CERTIFICATE AND
 DESIGNATION AT ANY TIME IF THE COMMISSIONER DETERMINES THAT  THE  ORGAN-
 IZATION:  (I) NO LONGER SATISFIES THE REQUIREMENTS SET FORTH IN SUBDIVI-
 SION TWO OF THIS SECTION; OR (II) PROVIDED FALSE INFORMATION MATERIAL TO
 THE DETERMINATION OF THE COMMISSIONER THAT  THE  ORGANIZATION  SATISFIED
 SUCH REQUIREMENTS.
   (D)  THE  COMMISSIONER MAY ESTABLISH A TRUNCATED APPLICATION OR PROCE-
 DURE TO ALLOW FOR THE RENEWAL OR RE-ISSUANCE OF SUCH CERTIFICATION.
   § 3. This act shall take effect immediately and  shall  be  deemed  to
 have  been  in  full force and effect on and after January 19, 2025, and
 shall expire and be deemed repealed January 20, 2029.

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