Charitable Organizations - Charitable Donation and Tax-Exempt Status - Revocation (Keeping Charities Nonpartisan Act of 2026)

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0514*

HOUSE BILL 514
C2, Q3, Q4 EMERGENCY BILL 6lr0736
CF SB 4
By: Delegate Rosenberg
Introduced and read first time: January 27, 2026
Assigned to: Economic Matters

A BILL ENTITLED

AN ACT concerning 1

Charitable Organizations – Charitable Donation and Tax–Exempt Status – 2
Revocation 3
(Keeping Charities Nonpartisan Act of 2026) 4

FOR the purpose of altering, for the purpose of certain provisions of law that regulate 5
charitable organizations, the definition of “charitable organization” to include a 6
certain person that is recognized by the Internal Revenue Service to receive 7
donations that are deductible from federal income tax; prohibiting certain charitable 8
organizations from participating in or intervening in a political campaign on behalf 9
of or in opposition to a candidate for public office; authorizing the Secretary of State 10
and the Attorney General, acting jointly, to order the revocation of certain 11
tax–exempt statuses of a charitable organization under certain circumstances; 12
requiring the Comptroller and the Director of the State Department of Assessments 13
and Taxation to revoke certain tax –exempt statuses under certain circumstances; 14
providing that a char itable organization whose tax –exempt status is revoked does 15
not qualify for certain income, sales and use, and property tax exemptions; requiring 16
the Attorney General to monitor action by the federal government for a certain 17
purpose; and generally relating to charitable organizations. 18

BY repealing and reenacting, without amendments, 19
Article – Business Regulation 20
Section 6–101(a), 6–402(a), and 6.5–101(a) 21
Annotated Code of Maryland 22
(2024 Replacement Volume and 2025 Supplement) 23

BY repealing and reenacting, with amendments, 24
Article – Business Regulation 25
Section 6–101(d), 6–205, 6–402(b)(9) and (10), 6.5–101(c), and 6.5–103(c) 26
Annotated Code of Maryland 27
(2024 Replacement Volume and 2025 Supplement) 28

2 HOUSE BILL 514

BY adding to 1
Article – Business Regulation 2
Section 6–402(b)(10) and 6–623 3
Annotated Code of Maryland 4
(2024 Replacement Volume and 2025 Supplement) 5

BY repealing and reenacting, with amendments, 6
Article – Tax – General 7
Section 10–104 and 11–204 8
Annotated Code of Maryland 9
(2022 Replacement Volume and 2025 Supplement) 10

BY repealing and reenacting, with amendments, 11
Article – Tax – Property 12
Section 7–202 and 7–204 13
Annotated Code of Maryland 14
(2019 Replacement Volume and 2025 Supplement) 15

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 16
That the Laws of Maryland read as follows: 17

Article – Business Regulation 18

6–101. 19

(a) In this title the following words have the meanings indicated. 20

(d) (1) “Charitable organization” means: 21

(i) a person that: 22

1. A. is or holds itself out to be a benevolent, educational, 23
eleemosynary, humane, patriotic, philanthropic, or religious organization; OR 24

B. IS RECOGNIZED BY THE INTERNAL REVENUE 25
SERVICE AS AUTHORIZED TO RECEIVE DONATIONS THAT ARE DEDUCTIBLE FROM 26
FEDERAL INCOME TAX UNDER § 170 OF THE INTERNAL REVENUE CODE; and 27

2. solicits or receives charitable contributions from the 28
public; or 29

(ii) an ambulance, fire fighting, fraternal, rescue, or police or other 30
law enforcement organization when it solicits charitable contributions from the public. 31

(2) “Charitable organization” includes an area, branch, chapter, office, or 32
similar affiliate that solicits charitable contributions from the public within the State for a 33
HOUSE BILL 514 3

charitable organization that is organized or has its principal place of business outside the 1
State. 2

(3) “Charitable organization” does not include: 3

(i) an agency of the State government or of a political subdivision; 4
or 5

(ii) a political club, committee, or party. 6

6–205. 7

(a) (1) The Secretary of State or the Attorney General may investigate an 8
alleged violation of this title. 9

(2) (i) In the course of any examination, investigation, or hearing, the 10
Secretary of State or the Attorney General may subpoena witnesses, administer oaths, 11
examine an individual under oath, serve written interrogatories, and compel production of 12
records, books, papers, and other documents. 13

(ii) Information obtained under this subsection is not admissible in 14
a subsequent criminal proceeding against the person who provided the information. 15

(b) If the Secretary of State or the Attorney General finds or has reasonable 16
grounds to believe that a charitable organization, charitable representative, or public safety 17
solicitor has violated this title, the Secretary of State or the Attorney General may take one 18
or more of the following actions: 19

(1) by mediation with the apparent violators and any representatives they 20
may choose to assist them, enter into a written assurance of discontinuance, written 21
assurance of voluntary compliance, or other settlement agreement with the apparent 22
violators, in accordance with subsection (c) of this section; 23

(2) summarily issue a cease and desist order to the violator, if the Secretary 24
of State or the Attorney General: 25

(i) finds that: 26

1. § 6–623 OF THIS TITLE HAS BEEN VIOLATED; OR 27

2. ANY OTHER PROVISION OF this title has been violated 28
and that the public health, safety, or welfare requires emergency action; and 29

(ii) gives the violator written notice of the order, the reasons for the 30
order, and the right of the violator to request a hearing under subsection (g) of this section; 31
or 32

4 HOUSE BILL 514

(3) EXCEPT IN THE ENFORCEMENT OF § 6–623 OF THIS TITLE, refer the 1
matter to the appropriate State’s Attorney for prosecution. 2

(c) A settlement agreement under subsection (b)(1) of this section may include 3
one or more of the following stipulations or conditions: 4

(1) payment by the apparent violator of the cost of the investigation; 5

(2) payment by the apparent violator of civil penalties a court could order 6
OR THE SECRETARY OF STATE OR THE ATTORNEY GENERAL COULD ASSESS under 7
this title; 8

(3) payment by the apparent violator of refunds to donors a court could 9
order under this title; 10

(4) payment by the apparent violator of contributions received to charitable 11
or public safety beneficiaries or for charitable or public safety purposes consistent with the 12
beneficiaries named or purposes represented in the charitable or public safety solicitations 13
which generated the contributions; or 14

(5) any other stipulation, condition, or remedy that will correct a violation 15
of this title. 16

(d) An agreement under this section is for conciliation purposes only and does not 17
constitute an admission by any party that the law has been violated. 18

(e) (1) It is a violation of this title to fail to adhere to any provision contained 19
in a settlement agreement. 20

(2) A failure of the Secretary of State or the Attorney General to enforce a 21
violation of any provision of a settlement agreement does not constitute a waiver of that or 22
any other provision, or of any right of the Secretary of State or the Attorney General. 23

(f) The Attorney General may sue in the circuit court for the county in which the 24
alleged violation occurred for an order that: 25

(1) restrains further violation of this title; 26

(2) restrains the defendant from making further charitable or public safety 27
solicitations in the State; 28

(3) except as provided under § 6–5A–11 of this title, recovers for the State 29
a civil penalty not to exceed $5,000 for each willful violation of this title; 30

(4) except as provided under § 6–5A–11 of this title, recovers for the State 31
a civil penalty not to exceed $3,000 for each grossly negligent violation of this title; 32

HOUSE BILL 514 5

(5) enforces compliance with this title; or 1

(6) secures any other appropriate relief, including: 2

(i) refunds to donors; and 3

(ii) payment of the charitable or public safety contributions received 4
by the solicitor to charitable or public safety purposes or beneficiaries consistent with the 5
purposes represented or beneficiaries named in the charitable or public safety solicitations 6
which generated the contributions. 7

(g) (1) If the Secretary of State or the Attorney General issues a cease and 8
desist order to a person, the person may request a hearing from the Secretary of State. 9

(2) Within 30 days after a request is submitted, the Secretary of State shall 10
hold a hearing in accordance with Title 10, Subtitle 2 of the State Government Article. 11

6–402. 12

(a) A registration statement shall be on the form that the Secretary of State 13
provides. 14

(b) Except as provided in subsection (c) of this section, the registration statement 15
shall contain or be accompanied by: 16

(9) (i) a certification that all taxes due from the applicant to the State 17
or to Baltimore City or a county of the State for the preceding fiscal year have been paid, 18
and all taxes the applicant was required to collect and pay over to the State or to Baltimore 19
City or a county of the State for the preceding fiscal year have been collected and paid over; 20
or 21

(ii) a certification that the taxes due from the applicant to the State 22
or to Baltimore City or a county are under dispute and the dispute has not been finally 23
resolved; [and] 24

(10) A STATEMENT INDICATI NG THAT THE CHARITAB LE 25
ORGANIZATION DOES NO T AND WILL NOT PARTI CIPATE IN OR INTERVE NE IN , 26
INCLUDING THROUGH TH E PUBLICATION OR DIS TRIBUTION OF STATEME NTS, A 27
POLITICAL CAMPAIGN O N BEHALF OF OR IN OP POSITION TO A CANDID ATE FOR 28
PUBLIC OFFICE; AND 29

[(10)] (11) any other informatio n that the Secretary of State requires by 30
regulation. 31

6–623. 32

6 HOUSE BILL 514

(A) IN THIS SECTION , “DIRECTOR” MEANS THE DIRECTOR OF THE STATE 1
DEPARTMENT OF ASSESSMENTS AND TAXATION. 2

(B) THIS SECTION APPLIES TO EACH CHARITABLE ORGANIZATION THAT: 3

(1) IS INCORPORATED OR OTHERWISE ESTABLI SHED UNDER STATE 4
LAW OR THE LAWS OF ANOTHER STATE; 5

(2) IS AUTHORIZED TO RECEIVE DONATIONS THAT ARE DEDUCTIBLE 6
FROM FEDERAL INCOME TAX UNDER § 170 OF THE INTERNAL REVENUE CODE; AND 7

(3) (I) IS REQUIRED TO REGIS TER WITH THE SECRETARY OF 8
STATE UNDER SUBTITLE 4 OF THIS TITLE; OR 9

(II) IF EXEMPT FROM THE R EGISTRATION REQUIREM ENT, 10
CONDUCTS BUSINESS OR OTHER ACTIVITIES IN THE STATE. 11

(C) (1) A CHARITABLE ORGANIZAT ION MAY NOT PARTICIP ATE IN OR 12
INTERVENE IN A POLIT ICAL CAMPAIGN ON BEH ALF OF OR IN OPPOSITION TO A 13
CANDIDATE FOR PUBLIC OFFICE, INCLUDING THROUGH PU BLICATION OF OR 14
DISTRIBUTION OF STATEMENTS. 15

(2) PARAGRAPH (1) OF THIS SUBSECTION S HALL BE INTERPRETED 16
AND APPLIED IN THE SAME MANNER AS THE PROHIBITION ON POLITICAL CAMPAIGN 17
ACTIVITY UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE WAS INTERPRETED 18
AND APPLIED BY THE INTERNAL REVENUE SERVICE AS OF JANUARY 19, 2025. 19

(D) (1) TO ENFORCE THIS SECTI ON, IN ADDITION TO THE A UTHORITY 20
PROVIDED UNDER § 6–205 OF THIS TITLE AND SUBJECT TO PARAGRAPHS (2) AND (3) 21
OF THIS SUBSECTION , THE SECRETARY OF STATE OR THE ATTORNEY GENERAL 22
MAY: 23

(I) ASSESS CIVIL PENALTI ES IN ACCORDANCE WIT H 24
SUBSECTION (E) OF THIS SECTION; OR 25

(II) ORDER A REVOCATION IN ACCORDANCE WITH SUBSECTION 26
(F) OF THIS SECTION. 27

(2) (I) 1. IF THE SECRETARY OF STATE OR THE ATTORNEY 28
GENERAL FINDS OR HAS REASONABLE GROUNDS TO BELIEVE THAT A CHA RITABLE 29
ORGANIZATION HAS VIO LATED THIS SECTION , THE SECRETARY OF STATE OR THE 30
ATTORNEY GENERAL SHALL PROVIDE WRITTEN NOTICE TO TH E CHARITAB LE 31
ORGANIZATION. 32
HOUSE BILL 514 7

2. SUBJECT TO SUBPARAGRA PH (II) OF THIS 1
PARAGRAPH, ISSUANCE OF A CEASE AND DESIST ORDER UND ER § 6–205 OF THIS 2
TITLE FOR A VIOLATIO N OF THIS SECTION IS A VALID FORM OF NOTI CE IN 3
ACCORDANCE WITH THIS SUBPARAGRAPH. 4

(II) NOTICE REQUIR ED UNDER THIS PARAGR APH SHALL 5
INCLUDE A DESCRIPTION OF: 6

1. THE VIOLATION; 7

2. ANY OFFER FOR MEDIAT ION AS PROVIDED IN § 8
6–205(B)(1) OF THIS TITLE; 9

3. ANY CIVIL PENALTY AS SESSED UNDER SUBSECT ION 10
(E) OF THIS SECTION; 11

4. ANY REVOCATION OF A TAX–EXEMPT STATUS UNDER 12
SUBSECTION (F) OF THIS SECTION; 13

5. THE PENALTY AVOIDANC E PROCESS DESCRIBED IN 14
PARAGRAPH (3) OF THIS SUBSECTION; AND 15

6. THE APPEAL RIGHTS PR OVIDED UNDER SUBSECTION 16
(G) OF THIS SECTION. 17

(3) (I) SUBJECT TO SUBPARAGRAPH (II) OF THIS PARAGRAPH, IF A 18
CHARITABLE ORGANIZATION RECEIVES NOTICE FOR VIOLATING THIS SECTION, THE 19
CHARITABLE ORGANIZAT ION MAY AVOID THE VI OLATION AND IMPOSITI ON OF A 20
PENALTY UNDER THIS SECTION IF THE CHARITABLE ORGANIZATION: 21

1. CAN SHOW THE CONDUCT GIVING RISE TO THE 22
VIOLATION WAS NOT AP PROVED OR AUTHORIZED BY THE CHIEF EXECUTI VE OR 23
GOVERNING BODY OF THE CHARITABLE ORGANIZATION; AND 24

2. PUBLICLY AND EFFECTI VELY DISCLAIMS THE 25
CONDUCT GIVING RISE TO THE VIOLATION NOT LATER THAN 7 DAYS AFTER 26
RECEIVING NOTICE OF THE VIOLATION. 27

(II) FOR PURPOSES OF SUBPA RAGRAPH (I) OF THIS 28
PARAGRAPH, NOTICE OCCURS ON THE EARLIER DATE OF WHEN THE CHARITABLE 29
ORGANIZATION: 30

8 HOUSE BILL 514

1. HAS ACTUAL KNOWLEDGE OR REASONABLY SHOULD 1
HAVE KNOWN THAT THE CONDUCT GIVING RISE TO THE VIOLATION HAS OCCURRED 2
AND IS REASONABLY LIKELY TO BE IN VIOLATION OF THIS SECTION; OR 3

2. RECEIVES NOTICE IN A CCORDANCE WITH 4
PARAGRAPH (2) OF THIS SUBSECTION. 5

(E) (1) A CHARITABLE ORGANIZATION THAT VIOLATES TH IS SECTION IS 6
SUBJECT TO A CIVIL P ENALTY NOT EXCEEDING $5,000 FOR EACH VIOLATION , IN 7
ADDITION TO ANY OTHER PENALTIES UNDER THIS SECTION. 8

(2) EACH CONSECUTIVE 5–DAY PERIOD THAT A VI OLATION 9
CONTINUES IS A SEPARATE VIOLATION. 10

(3) EACH CIVIL PENALTY ASSESSED UNDER THIS SUBSECTION SHALL 11
BE PAID TO THE GENERAL FUND OF THE STATE. 12

(F) (1) IF THE SECRETARY OF STATE AND THE ATTORNEY GENERAL, 13
ACTING JOINTLY , FIND OR HAVE REASONA BLE GROUNDS TO BELIE VE THAT A 14
CHARITABLE ORGANIZAT ION HAS WILLFULLY VI OLATED THIS SECTION , THE 15
SECRETARY OF STATE AND THE ATTORNEY GENERAL MAY ORDER A R EVOCATION 16
OF A TAX –EXEMPT STATUS DESCRI BED UNDER PARAGRAPH (3)(I) OF THIS 17
SUBSECTION. 18

(2) IF A CHARITABLE ORGAN IZATION FAILS TO TIM ELY REQUEST AN 19
APPEAL OF A REVOCATI ON IN ACCORDANCE WIT H SUBSECTION (G)(2) OF THIS 20
SECTION OR IF AN APPEAL OF THE REVOCATION IS HE ARD AND DENIED , THE 21
SECRETARY OF STATE SHALL PROMPTLY PROVIDE WRITTEN NOTI CE TO THE 22
CHARITABLE ORGANIZATION, THE COMPTROLLER, AND THE DIRECTOR. 23

(3) (I) WITHIN 30 DAYS AFTER RECEIVING WRITTEN NOTICE FROM 24
THE SECRETARY OF STATE UNDER PARAGRAPH (2) OF THIS SUBSECTION , THE 25
COMPTROLLER AND THE DIRECTOR SHALL REVOKE FROM THE CHARITABLE 26
ORGANIZATION, AS APPLICABLE: 27

1. AN INCOME TAX EXEMPT ION THAT HAS BEEN 28
GRANTED UNDER § 10–104 OF THE TAX – GENERAL ARTICLE; 29

2. A SALES AND USE TAX EXEMPTION CERTIFICATE THAT 30
HAS BEEN ISSUED UNDER § 11–204 OF THE TAX – GENERAL ARTICLE; AND 31

3. A PROPERTY TAX EXEMP TION THAT HAS BEEN 32
GRANTED UNDER § 7–202 OR § 7–204 OF THE TAX – PROPERTY ARTICLE. 33
HOUSE BILL 514 9

(II) THE COMPTROLLER AND THE DIRECTOR SHALL PROMPTLY 1
PROVIDE WRITTEN NOTI CE TO THE CHARITABLE ORGANIZATION OF THE 2
REVOCATION OF ANY TA X–EXEMPT STATUS AND AN Y APPEAL RIGHTS AS M AY BE 3
AVAILABLE. 4

(4) (I) A REVOCATION UNDER THI S SECTION SHALL REMA IN IN 5
EFFECT FOR 2 YEARS FROM THE DATE THE REVOCATION BECOMES EFFECTIVE. 6

(II) AFTER THE 2–YEAR REVOCATION PERI OD ELAPSES , THE 7
CHARITABLE ORGANIZAT ION MAY REAPPLY TO T HE COMPTROLLER OR THE 8
DIRECTOR FOR ANY TAX –EXEMPT STATUS THAT W AS AFFECTED BY THE 9
REVOCATION. 10

(G) A CHARITABLE ORGANIZATION THAT RECEIVES NOTICE OF A VIOLATION 11
UNDER THIS SECTION SHALL: 12

(1) WITHIN 15 DAYS AFTER RECEIPT O F A NOTICE THAT OFFE RS 13
MEDIATION, ACCEPT THE OFFER FOR MEDIATION BY RESPOND ING TO THE 14
SECRETARY OF STATE; OR 15

(2) WITHIN 30 DAYS AFTER RECEIPT O F A NOTICE THAT ASSESSES A 16
CIVIL PENALTY OR REVOKES A TAX–EXEMPT STATUS UNDER THIS SECTION: 17

(I) PAY THE AMOUNT OF EACH CIVIL PENALTY ASSESSED; OR 18

(II) REQUEST A HEARING WI TH THE SECRETARY OF STATE TO 19
BE HELD IN ACCORDANCE WITH TITLE 10, SUBTITLE 2 OF THE STATE GOVERNMENT 20
ARTICLE OR IN ACCORDANCE WITH § 6–205(G) OF THIS TITLE. 21

(H) THE SECRETARY OF STATE, IN CONSULTATION WITH THE ATTORNEY 22
GENERAL, THE COMPTROLLER, AND THE DIRECTOR, SHALL ADOPT REGULATIONS 23
TO CARRY OUT THIS SECTION, INCLUDING: 24

(1) PROCEDURES FOR PENALTY AVOIDA NCE UNDER SUBSECTION 25
(D)(3) OF THIS SECTION; AND 26

(2) CRITERIA TO BE USED IN DETERMINING THE A MOUNT OF ANY 27
CIVIL PENALTIES ASSESSED UNDER SUBSECTION (E) OF THIS SECTION. 28

(I) ENFORCEMENT ACTION UN DER THIS SECTION DOE S NOT PRECLUDE 29
ENFORCEMENT ACTION UNDER TITLE 6.5 OF THIS ARTICLE BY THE SECRETARY OF 30
STATE OR THE ATTORNEY GENERAL. 31
10 HOUSE BILL 514

6.5–101. 1

(a) In this title the following words have the meanings indicated. 2

(c) (1) “Charitable purpose” means the relief of poverty, the advancement o f 3
education or religion, the promotion of health, the promotion of a governmental purpose, or 4
any other purpose whose achievement is beneficial to the community. 5

(2) “CHARITABLE PURPOSE” DOES NOT INCLUDE PARTICIPATING IN 6
OR INTERVENING IN A POLITICAL CAMPAIGN, INCLUDING THE PUBLIS HING OR 7
DISTRIBUTING OF STATEMENTS, ON BEHALF OF OR IN OPPOSITION TO A CANDIDATE 8
FOR PUBLIC OFFICE IN THE SAME MANNER AS § 501(C)(3) OF THE INTERNAL 9
REVENUE CODE WAS INTERPRETED AND APPLIED BY THE INTERNAL REVENUE 10
SERVICE AS O F JANUARY 19, 2025, WITH RESPECT TO PROH IBITING POLITICAL 11
CAMPAIGN ACTIVITY. 12

6.5–103. 13

(c) The remedies under this section are in addition to and do not limit the powers 14
and duties of the Secretary of State and the Attorney General under § 6 –205 OR § 6–623 15
of this article or § 6.5–102 of this title. 16

Article – Tax – General 17

10–104. 18

(A) The income tax does not apply to the income of: 19

(1) a common trust fund, as defined in § 3 –501(b) of the Financial 20
Institutions Article; 21

(2) except as provided in SUBSECTION (B) OF THIS SECTION AND §§ 22
10–101(e)(3) of this subtitle and 10–304(2) of this title, an organization that is exempt from 23
taxation under § 408(e)(1) or § 501 of the Internal Revenue Code; 24

(3) a financial institution that is subject to the fi nancial institution 25
franchise tax; 26

(4) a person subject to taxation under Title 6 of the Insurance Article; 27

(5) except as provided in § 10 –102.1 of this subtitle, a partnership, as 28
defined in § 761 of the Internal Revenue Code; 29

(6) except as provided in § 10–102.1 of this subtitle and § 10–304(3) of this 30
title, an S corporation; 31
HOUSE BILL 514 11

(7) except as provided in § 10–304(4) of this title, an investment conduit or 1
a special exempt entity; or 2

(8) except as provided in § 10 –102.1 of this subtitle, a limited liability 3
company as defined under Title 4A of the Corporations and Associations Article to the 4
extent that the company is taxable as a partnership, as defined in § 761 of the Internal 5
Revenue Code. 6

(B) (1) IN THIS SUBSECTION , “CHARITABLE ORGANIZ ATION” HAS THE 7
MEANING STATED IN § 6–101 OF THE BUSINESS REGULATION ARTICLE. 8

(2) THIS SUBSECTION APPLI ES ONLY TO A CHARITA BLE 9
ORGANIZATION THAT IS SUBJECT TO THE REQUI REMENTS OF § 6–623 OF THE 10
BUSINESS REGULATION ARTICLE. 11

(3) (I) THE EXEMPTION PROVIDED UNDER SUBSECTION (A)(2) OF 12
THIS SECTION DOES NOT APPLY TO A CHARITABLE ORGANIZATION THAT IS EXEMPT 13
FROM TAXATION UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE IF THE 14
CHARITABLE ORGANIZAT ION PARTICIPATES IN OR INTERVENES IN , INCLUDING 15
THROUGH PUBLICATIO N OR DISTRIBUTION OF STATEMENTS, A POLITICAL 16
CAMPAIGN ON BEHALF OF OR IN OPPOSITION TO A CANDIDATE FOR PUBLIC OFFICE. 17

(II) SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL BE 18
INTERPRETED AND APPL IED IN THE SAME MANN ER AS THE PROHIBITIO N ON 19
POLITICAL CAMPAIGN A CTIVITY UNDER § 501(C)(3) OF THE INTERNAL REVENUE 20
CODE WAS INTERPRETED AND APPLIED BY THE INTERNAL REVENUE SERVICE AS OF 21
JANUARY 19, 2025. 22

(4) IF A REVOCATION OF A CHARITABLE ORGANIZAT ION’S 23
TAX–EXEMPT STATUS IS ORD ERED IN ACCORDANCE W ITH § 6–623(F) OF THE 24
BUSINESS REGULATION ARTICLE, THE CHARITABLE ORGAN IZATION DOES NOT 25
QUALIFY FOR THE EXEMPTION UNDER SUBSECTION (A)(2) OF THIS SECTION UNTIL 26
THE TIME OF THE REVOCATION ELAPSES AS REQUIRED. 27

(5) PARAGRAPH (4) OF THIS SUBSECTION APPLIES BEGINNING WITH 28
THE TAXABLE YEAR THAT TH E REVOCATION OF A CH ARITABLE ORGANIZATIO N’S 29
TAX–EXEMPT STATUS IS ORD ERED UNDER § 6–623(F) OF THE BUSINESS 30
REGULATION ARTICLE. 31

11–204. 32

(a) [The] EXCEPT AS PROVIDED IN SUBSECTION (F) OF THIS SECTION, THE 33
sales and use tax does not apply to: 34
12 HOUSE BILL 514

(1) a sale to a cemetery company, as described in § 501(c)(13) of the Internal 1
Revenue Code in effect on July 1, 1987; 2

(2) a sale to a credit union organized under the laws of the State or of the 3
United States; 4

(3) a sale to a nonprofit or ganization made to carry on its work, if the 5
organization: 6

(i) 1. is located in the State; 7

2. is located in an adjacent jurisdiction and provides its 8
services within the State on a routine and regular basis; or 9

3. is located in an adjacent jurisdiction whose law: 10

A. does not impose a sales or use tax on a sale to a nonprofit 11
organization made to carry on its work; or 12

B. contains a reciprocal exemption from sales and use tax for 13
sales to nonprofit organizations located in adjacent j urisdictions similar to the exemption 14
allowed under this subsection; 15

(ii) is a charitable, educational, or religious organization; 16

(iii) is not the United States; and 17

(iv) except for the American National Red Cross, is not a unit or 18
instrumentality of the United States; 19

(4) a sale, not exceeding $500, to a nonprofit incorporated senior citizens’ 20
organization made to carry on its work, if the organization: 21

(i) is located in the State; and 22

(ii) receives funding from the State or a polit ical subdivision of the 23
State; 24

(5) a sale to a volunteer fire company or department or volunteer 25
ambulance company or rescue squad located in the State made to carry on the work of the 26
company, department, or squad; 27

(6) a sale of tangible personal property, a digital code, or a digital product 28
to a nonprofit parent–teacher association located in the State if the association makes the 29
purchase to contribute the property to a school to which a sale is exempt under item (3) of 30
this subsection or § 11–220 of this subtitle; 31
HOUSE BILL 514 13

(7) a sale to a nonprofit organization made to carry on its work, if the 1
organization: 2

(i) is qualified as tax exempt under § 501(c)(4) of the Internal 3
Revenue Code; and 4

(ii) is engaged primarily in providing a program to render its best 5
efforts to contain, clean up, and otherwise mitigate spills of oil or other substances occurring 6
in United States coastal and tidal waters; or 7

(8) a sale to a bona fide nationally organized and recognized organization 8
of veterans of the armed forces of the United States or an auxiliary of the organization or 9
one of its units, if the organization is qualified as tax exempt under § 501(c)(4) or § 10
501(c)(19) of the Internal Revenue Code. 11

(b) [The] EXCEPT AS PROVIDED IN SUBSECTION (F) OF THIS SECTION, THE 12
sales and use tax does not apply to a sale by: 13

(1) a bona fide church or religious organization, if the sale is made for the 14
general purposes of the church or organization; 15

(2) a gift shop at a mental hospital that the Maryland Depart ment of 16
Health operates; 17

(3) a hospital thrift shop that: 18

(i) is operated by all volunteer staff; 19

(ii) sells only donated articles; 20

(iii) contributes the profits from sales to the hospital with which the 21
shop is associated; and 22

(iv) is not operated in conjunction with a gift shop or another retail 23
establishment; 24

(4) a vending facility operated under the Maryland Vending Program for 25
the Blind if: 26

(i) the facility is located on property held or acquired by or for the 27
use of the United States for any military or naval purpose; and 28

(ii) a post exchange or other tax –exempt concession is located and 29
operated on the same property; 30

14 HOUSE BILL 514

(5) an elementary or secondary school in the State or a nonprofit 1
parent–teacher organization or other nonprofit organization within an elementary or 2
secondary school in the State for the sale of magazine subscriptions in a fund –raising 3
campaign, if the net proceeds are used solely for the educational benefit of the school or its 4
students, including a sale resulting from an agreement or contract with an organization to 5
participate in a fund–raising campaign for a percentage of the gross receipts under which 6
students act as agents or salespersons for the organization by selling or taking orders for 7
the sale; 8

(6) a parent –teacher organization or other organization within an 9
elementary or secondary school in the State or within a school system in the State; 10

(7) subject to subsection (e) of this section, a bona fide church, religious 11
organization, or other nonprofit organization exempt from taxation under § 501(c)(3) of the 12
Internal Revenue Code if: 13

(i) the sale is made at an auction sale; and 14

(ii) the proceeds of the sale are used to carry on the exempt purposes 15
of the church or organization; or 16

(8) a nonprofit organization exempt from taxation under § 501(c)(3) of the 17
Internal Revenue Code that maintains a memorial on property that is owned by the State 18
if the proceeds of the sale are used to maintain a memorial on property that is owned by 19
the State. 20

(c) To qualify as an organization to which a sale is exempt under subsection (a)(3) 21
or (5) of this section, the organization shall file an application for an exemption certificate 22
with the Comptroller. 23

(d) The Comptroller may treat the possession of an effective determination letter 24
of status under § 501(c)(3) or (13) of the Internal Revenue Code from the Internal Revenue 25
Service as evidence that an organization qualifies under subsection (a)(3) or (5) or (1) of this 26
section, respectively. 27

(e) For a sale described under subsection (b)(7) of this section that is not otherwise 28
exempt under this section, only that part of the sale price that qualifies for a deduction 29
under the federal income tax as a charitable contribution under the regulations an d 30
guidelines of the Internal Revenue Service is exempt from the sales and use tax under this 31
section. 32

(F) (1) IN THIS SUBSECTION , “CHARITABLE ORGANIZAT ION” HAS THE 33
MEANING STATED IN § 6–101 OF THE BUSINESS REGULATION ARTICLE. 34

HOUSE BILL 514 15

(2) THIS SUBSECTION APPLI ES ONLY TO A CHARITA BLE 1
ORGANIZATION THAT IS SUBJECT TO THE REQUI REMENTS OF § 6–623 OF THE 2
BUSINESS REGULATION ARTICLE. 3

(3) (I) THE EXEMPTION PROVIDE D UNDER THIS SECTION DOES 4
NOT APPLY TO A CHARI TABLE ORGANIZATION T HAT IS EXEMPT FROM T AXATION 5
UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE IF THE CHARITABL E 6
ORGANIZATION PARTICIPATES IN OR INTERVEN ES IN A POLITICAL CA MPAIGN ON 7
BEHALF OF OR IN OPPO SITION TO A CANDIDAT E FOR PUBLIC OFFICE , INCLUDING 8
THROUGH PUBLICATION OR DISTRIBUTION OF STATEMENTS. 9

(II) SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL BE 10
INTERPRETED AND APPL IED IN THE SAME MANN ER AS THE PROHIBITIO N ON 11
POLITICAL CAMPAIGN A CTIVITY UNDER § 501(C)(3) OF THE INTERNAL REVENUE 12
CODE WAS INTERPRETED AND APPLIED BY THE INTERNAL REVENUE SERVICE AS OF 13
JANUARY 19, 2025. 14

(4) IF A REVOCATION OF A CHARITABLE ORGANIZAT ION’S 15
TAX–EXEMPT STATUS IS ORD ERED IN ACCORDANCE W ITH § 6–623(F) OF THE 16
BUSINESS REGULATION ARTICLE, THE CHARITABLE ORGAN IZATION DOES NOT 17
QUALIFY FOR AN EXEMP TION UNDER THIS SECT ION UNTIL THE TIM E OF THE 18
REVOCATION ELAPSES AS REQUIRED. 19

Article – Tax – Property 20

7–202. 21

(a) In this section: 22

(1) “fraternal organization” means any organization that: 23

(i) is conducted solely for the benefit of its members and its 24
beneficiaries; 25

(ii) is operated on a lodge system with a ritualistic activity; and 26

(iii) has a representative form of government; 27

(2) “fraternal organization” includes a sororal organization; and 28

(3) “fraternal organization” does not include: 29

(i) any college or high school fraternity or sorority; or 30

16 HOUSE BILL 514

(ii) any other fraternal or sororal organization the membership of 1
which is restricted wholly or largely to students or graduates of an educational institution 2
or a professional school. 3

(b) (1) Except as provided i n [subsection] SUBSECTIONS (c) AND (E) of this 4
section and § 6 –302(d) of this article and subject to § 5
7–204.1 of this subtitle, property is not subject to property tax if the property: 6

(i) is necessary for and actually used exclusively for a charitab le or 7
educational purpose to promote the general welfare of the people of the State, including an 8
activity or an athletic program of an educational institution; and 9

(ii) is owned by: 10

1. a nonprofit hospital; 11

2. a nonprofit charitable, fraternal, educational, or literary 12
organization including: 13

A. a public library that is authorized under Title 23 of the 14
Education Article; and 15

B. a men’s or women’s club that is a nonpolitical and nonstock 16
club; 17

3. a corporation, limited li ability company, or trustee that 18
holds the property for the sole benefit of an organization that qualifies for an exemption 19
under this section; or 20

4. a nonprofit housing corporation. 21

(2) The exemption under paragraph (1)(ii)1 of this subsection includes any 22
personal property initially leased by a nonprofit hospital for more than 1 year under a lease 23
that is noncancellable except for cause. 24

(c) (1) This subsection does not apply to real property owned by a nonprofit 25
charitable museum that: 26

(i) is open to the public; and 27

(ii) does not charge an admission fee. 28

(2) Except for a nonprofit hospital, not more than 100 acres of real property 29
owned by an exempt organization and appurtenant to the premises of the exempt 30
organization is exempt from property tax, if the property is located outside of a municipal 31
corporation or Baltimore City. 32

HOUSE BILL 514 17

(3) Not more than 100 acres of real property of a nonprofit hospital that is 1
appurtenant to the hospital is exempt from property tax. 2

(d) (1) Notwithstanding § 7 –104 of this title and after filing the application 3
provided by § 7 –103 of this title, property tax on any property that is transferred to a 4
nonprofit charitable organization is abated from the date during the taxable year when the 5
instrument transferring title to the organization is recorded if: 6

(i) the property is transferred to a nonprofit charitable organization 7
qualified under § 501(c)(3) of the Internal Revenue Code; 8

(ii) the property becomes exempt under this section; 9

(iii) the property has a value less than $300,000 as listed in the 10
records of the Department on the date when the instrument transferring title to the 11
organization is recorded; and 12

(iv) the nonprofit charitable organization provides the Department 13
evidence of the property tax it actually paid or reimbursed at the property settlement. 14

(2) The amount of property tax abated under this subsection may not 15
exceed the amount of property tax actually paid or reimbursed by an eligible organization 16
at the property settlement. 17

(E) (1) IN THIS SUBSECTION , “CHARITABLE ORGANIZAT ION” HAS THE 18
MEANING STATED IN § 6–101 OF THE BUSINESS REGULATION ARTICLE. 19

(2) THIS SUBSECTION APPLI ES ONLY TO A CHARITA BLE 20
ORGANIZATION THAT IS SUBJECT TO THE REQUI REMENTS OF § 6–623 OF THE 21
BUSINESS REGULATION ARTICLE. 22

(3) (I) THE EXEMPTION PROVIDE D UNDER THIS SECTION DOES 23
NOT APPLY TO A CHARI TABLE ORGANIZATION T HAT IS EXEMPT FROM T AXATION 24
UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE IF THE CHARITABL E 25
ORGANIZATION PARTICI PATES IN OR INTERVEN ES IN , INCLUDING THROUGH 26
PUBLICATION OR DISTR IBUTION OF STATEMENT S, A POLITICAL CAMPAIGN ON 27
BEHALF OF OR IN OPPOSITION TO A CANDIDATE FOR PUBLIC OFFICE. 28

(II) SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL BE 29
INTERPRETED AND APPL IED IN THE SAME MANN ER AS THE PROHIBITION ON 30
POLITICAL CAMPAIGN A CTIVITY UNDER § 501(C)(3) OF THE INTERNAL REVENUE 31
CODE WAS INTERPRETED AND APPLIED BY THE INTERNAL REVENUE SERVICE AS OF 32
JANUARY 19, 2025. 33

18 HOUSE BILL 514

(4) IF A REVOCATION OF A CHARITABLE ORGANIZAT ION’S 1
TAX–EXEMPT STATUS IS ORD ERED IN ACCORDANCE WITH § 6–623(F) OF THE 2
BUSINESS REGULATION ARTICLE, THE CHARITABLE ORGAN IZATION DOES NOT 3
QUALIFY FOR THE PROP ERTY TAX EXEMPTION U NDER THIS SECTION UN TIL THE 4
TIME OF THE REVOCATION ELAPSES AS REQUIRED. 5

(5) PARAGRAPH (4) OF THIS SUBSECTION APPLIES BEGINNING WITH 6
THE TAXABLE YEAR THA T THE REVOCATION OF A CHARITABLE ORGANIZ ATION’S 7
TAX–EXEMPT STATUS IS ORD ERED UNDER § 6–623(F) OF THE BUSINESS 8
REGULATION ARTICLE. 9

7–204. 10

(A) Except as provided in § 6–302(d) of this article and subject to § 7–204.1 of this 11
subtitle AND EXCEPT AS PROVID ED IN SUBSECTION (B) OF THIS SECTION , property 12
that is owned by a religious group or organization is not subject to property tax if the 13
property is actually used exclusively for: 14

(1) public religious worship; 15

(2) a parsonage or convent; or 16

(3) educational purposes. 17

(B) (1) IN THIS SUBSECTION , “CHARITABLE ORGANIZAT ION” HAS THE 18
MEANING STATED IN § 6–101 OF THE BUSINESS REGULATION ARTICLE. 19

(2) THIS SUBSECTION APPLI ES ONLY TO A CHARITA BLE 20
ORGANIZATION TH AT IS SUBJECT TO THE REQUIREMENTS OF § 6–623 OF THE 21
BUSINESS REGULATION ARTICLE. 22

(3) (I) THE EXEMPTION PROVIDE D UNDER THIS SECTION DOES 23
NOT APPLY TO A CHARI TABLE ORGANIZATION T HAT IS EXEMPT FROM T AXATION 24
UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE IF THE CHARITABLE 25
ORGANIZATION PARTICIPATES IN OR INTERVEN ES IN A POLITICAL CA MPAIGN ON 26
BEHALF OF OR IN OPPO SITION TO A CANDIDAT E FOR PUBLIC OFFICE , INCLUDING 27
THROUGH PUBLICATION OR DISTRIBUTION OF STATEMENTS. 28

(II) SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL BE 29
INTERPRETED IN THE S AME MANNER AS THE PR OHIBITION ON POLITIC AL 30
CAMPAIGN ACTIVITY UN DER § 501(C)(3) OF THE INTERNAL REVENUE CODE WAS 31
INTERPRETED AND APPLIED BY THE INTERNAL REVENUE SERVICE AS OF JANUARY 32
19, 2025. 33

HOUSE BILL 514 19

(4) IF A REVOCATION OF A CHARITABLE ORGANIZATION’S 1
TAX–EXEMPT STATUS IS ORD ERED IN ACCORDANCE W ITH § 6–623(F) OF THE 2
BUSINESS REGULATION ARTICLE, THE CHARITABLE ORGAN IZATION DOES NOT 3
QUALIFY FOR THE PROP ERTY TAX EXEMPTION U NDER THIS SECTION UN TIL THE 4
TIME OF THE REVOCATION ELAPSES AS REQUIRED. 5

(5) PARAGRAPH (4) OF THIS SUBSECTION APPLIES BEGINNING WITH 6
THE TAXABLE YEAR THA T THE REVOCATION OF A CHARITABLE ORGANIZ ATION’S 7
TAX–EXEMPT STATUS IS ORD ERED UNDER § 6–623(F) OF THE BUSINESS 8
REGULATION ARTICLE. 9

SECTION 2. AND BE IT FURTHER ENACTED, That: 10

(a) In this section, “Johnson Amendment” means the provision contained in § 11
501(c)(3) of the Internal Revenue Code that prohibits a federally tax –exempt entity from 12
participating in or intervening in any political campaign on behalf of or in oppo sition to a 13
candidate for public office, including through publication or distribution of statements, as 14
that provision was interpreted and applied by the Internal Revenue Service as of January 15
19, 2025. 16

(b) Section 1 of this Act is contingent on any action by the President of the United 17
States or the Internal Revenue Service or change in federal law that, in whole or in part, 18
prevents the enforcement of, or renders null and void, the Johnson Amendment with 19
respect to any charitable organization to which the provisions of § 6 –623 of the Business 20
Regulation Article apply. 21

(c) (1) The Attorney General shall monitor action by the federal government 22
to determine whether any action or change occurs as described under subsection (b) of this 23
section. 24

(2) If the Attorney General determines an action or change occurs as 25
described under subsection (b) of this section, the Attorney General shall notify the 26
Department of Legislative Services within 5 days after the determination is made. 27

(d) If the Department of Legislative Services receives notice from the Attorney 28
General as described under subsection (c)(2) of this section, Section 1 of this Act shall take 29
effect on the date the notice is received by the Department of Legislative Services. 30

SECTION 3. AND B E IT FURTHER ENACTED, That, subject to Section 2 of this 31
Act, this Act is an emergency measure, is necessary for the immediate preservation of the 32
public health or safety, has been passed by a yea and nay vote supported by three–fifths of 33
all the members elected to each of the two Houses of the General Assembly, and shall take 34
effect from the date it is enacted. 35