S T A T E O F N E W Y O R K
________________________________________________________________________
7880--A
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 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the tax law, in relation to enacting 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 "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
OR FEDERAL STATUS. THE COMMISSIONER SHALL DESIGNATE SUCH ORGANIZATION AS
A "STATE PROTECTED NOT-FOR-PROFIT ORGANIZATION" UPON SUCH SATISFACTION.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11734-03-5
S. 7880--A 2
(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.
