California nonprofits that participated or aided in last year’s attack on the U.S. Capitol may lose their tax-exempt status via a new bill introduced by state Sen. Scott Wiener, D-San Francisco, on the anniversary of the insurrection.
Senate Bill 834, introduced Thursday, would suspend tax breaks for groups who fundraised and sent money to groups involved in the Capitol attack on Jan. 6, 2021, and who challenged the legitimacy of President Joe Biden’s win in the 2020 election.
Many groups that supported the effort are still in operation and use millions of dollars in tax-exempt funds to push the “Big Lie” narrative that former President Donald Trump defeated Biden, according to Wiener.
“Tax-exempt status is a privilege, not a right, and organizations that promote insurrection and conspiracy to commit insurrection — both of which are illegal — should not be given this special status to help them fundraise,” Wiener said in a statement.
California’s tax code already states organizations supporting terrorism are not qualified for tax-exempt status, and Wiener said the language should also include organizations that support insurrection.
“These poisonous organizations are attacking the heart of our nation and cynically scamming people and preying on their fears and misunderstandings,” Wiener said. “Nonprofits that conduct and support illegal activity — like insurrections — should not benefit from the privilege of tax-exempt status. SB 834 is one step on a long path toward accountability for those who perpetrated the Jan. 6 insurrection and who run the movement to overthrow American democracy.”
The U.S. Supreme Court deemed tax-exempt status can only be granted to charitable organizations that “may not be illegal or contrary to public policy.” SB 834 claims “violently attacking our legislators” violates this ruling.
Tax-exempt nonprofits do not pay corporate income taxes, and donations to them are often tax-deductible. Additionally, private foundations and donor-advised funds can only allocate funds to nonprofits in this category.
Sens. Josh Becker, D-San Mateo, Dave Min, D-Irvine, and Josh Newman, D-Fullerton, and Assemblymember Buffy Wicks, D-Oakland, are also co-authoring this legislation, and Assemblymember Kevin Mullin, D-South San Francisco, is a principal co-author.