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.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
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SENATE BILL 4
C2, Q3, Q4 EMERGENCY BILL 6lr0735
(PRE–FILED) CF HB 514
By: Senators Kagan and Ferguson
Requested: August 25, 2025
Introduced and read first time: January 14, 2026
Assigned to: Education, Energy, and the Environment and Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted with floor amendments
Read second time: March 7, 2026

CHAPTER ______

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, t he 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 and a certain private 8
foundation; prohibiting certain charitable orga nizations, including certain private 9
foundations, from participating in or intervening in a political campaign on behalf of 10
or in opposition to a candidate for public office; authorizing the Secretary of State 11
and the Attorney General, acting jointly, to o rder the revocation of certain 12
tax–exempt statuses of a charitable organization , including a certain private 13
foundation, under certain circumstances; requiring the Comptroller and the Director 14
of the State Department of Assessments and Taxation to revoke certain tax–exempt 15
statuses under certain circumstances; providing that a charitable organization , 16
including a certain private foundation, whose tax–exempt status is revoked does not 17
qualify for certain income, sales and use, and property tax exemptions; requiring the 18
Attorney General to monitor action by the federal government for a certain purpose; 19
and generally relating to charitable organizations. 20

BY repealing and reenacting, without amendments, 21
Article – Business Regulation 22
Section 6–101(a), 6–402(a), and 6.5–101(a) 23
2 SENATE BILL 4

Annotated Code of Maryland 1
(2024 Replacement Volume and 2025 Supplement) 2

BY repealing and reenacting, with amendments, 3
Article – Business Regulation 4
Section 6–101(d), 6–205, 6–402(b)(9) and (10), 6.5–101(c), and 6.5–103(c) 5
Annotated Code of Maryland 6
(2024 Replacement Volume and 2025 Supplement) 7

BY adding to 8
Article – Business Regulation 9
Section 6–402(b)(10) and 6–623 10
Annotated Code of Maryland 11
(2024 Replacement Volume and 2025 Supplement) 12

BY repealing and reenacting, with amendments, 13
Article – Tax – General 14
Section 10–104 and 11–204 15
Annotated Code of Maryland 16
(2022 Replacement Volume and 2025 Supplement) 17

BY repealing and reenacting, with amendments, 18
Article – Tax – Property 19
Section 7–202 and 7–204 20
Annotated Code of Maryland 21
(2019 Replacement Volume and 2025 Supplement) 22

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 23
That the Laws of Maryland read as follows: 24

Article – Business Regulation 25

6–101. 26

(a) In this title the following words have the meanings indicated. 27

(d) (1) “Charitable organization” means: 28

(i) a person that: 29

1. A. is or holds itself out to be a benevolent, educational, 30
eleemosynary, humane, patriotic, philanthropic, or religious organization; OR 31

B. IS RECOGNIZED BY THE INTERNAL REVENUE 32
SERVICE AS AUTHORIZED TO RECEIVE DONATIONS THAT ARE DEDUCTIBLE FROM 33
FEDERAL INCOME TAX UNDER § 170 OF THE INTERNAL REVENUE CODE; and 34
SENATE BILL 4 3

2. solicits or receives charitable contributions from the 1
public; or 2

(ii) an ambulance, fire fighting, fraternal, rescue, or police or other 3
law enforcement organization when it solicits charitable contributions from the public; OR 4

(III) FOR PURPOSES OF § 6–623 OF THIS TITLE ONLY, A PRIVATE 5
FOUNDATION AS DEFINED IN § 509 OF THE INTERNAL REVENUE CODE. 6

(2) “Charitable organization” includes an area, branch, chapter, office, or 7
similar affiliate that solicits charitable contributions from the public within the State for a 8
charitable organization that is organized or has its principal place of business outside the 9
State. 10

(3) “Charitable organization” does not include: 11

(i) an agency of the State government or of a political subdivision; 12
or 13

(ii) a political club, committee, or party. 14

6–205. 15

(a) (1) The Secretary of State or the Attorney General may investigate an 16
alleged violation of this title. 17

(2) (i) In the course of any examination, investigation, or hearing, the 18
Secretary of State or the Attorney General may subpoena witnesses, administer oaths, 19
examine an individual under oath, serve written interrogatories, and compel production of 20
records, books, papers, and other documents. 21

(ii) Information obtained under this subsection is not admissible in 22
a subsequent criminal proceeding against the person who provided the information. 23

(b) If the Secretary of State or the Attorney General finds or has reasonable 24
grounds to believe that a charitable organization, charitable representative, or public safety 25
solicitor has violated this title, the Secretary of State or the Attorney General may take one 26
or more of the following actions: 27

(1) by mediation with the apparent violators and any representatives they 28
may choose to assist them, enter into a written assurance of discontinuance, written 29
assurance of voluntary compliance, or other settlement agreement with the apparent 30
violators, in accordance with subsection (c) of this section; 31

(2) summarily issue a cease and desist order to the violator, if the Secretary 32
of State or the Attorney General: 33
4 SENATE BILL 4

(i) finds that: 1

1. § 6–623 OF THIS TITLE HAS BEEN VIOLATED; OR 2

2. ANY OTHER PROVISION OF this title has been violated 3
and that the public health, safety, or welfare requires emergency action; and 4

(ii) gives the violator written notice of the order, the reasons for the 5
order, and the right of the violator to request a hearing under subsection (g) of this section; 6
or 7

(3) EXCEPT IN THE ENFORCEMENT OF § 6–623 OF THIS TITLE, refer the 8
matter to the appropriate State’s Attorney for prosecution. 9

(c) A EXCEPT AS PROVIDED IN § 6–623(D) OF THIS TITLE , A settlement 10
agreement under subsection (b)(1) of this section may include one or more of the following 11
stipulations or conditions: 12

(1) payment by the apparent violator of the cost of the investigation; 13

(2) payment by the apparent violator of civil penalties a court could order 14
OR THE SECRETARY OF STATE OR THE ATTORNEY GENERAL COULD ASSESS under 15
this title; 16

(3) payment by the apparent violator of refunds to donors a court could 17
order under this title; 18

(4) payment by the apparent violator of contributions received to charitable 19
or public safety beneficiaries or for charitable or public safety purposes consistent with the 20
beneficiaries named or purposes represented in the charitable or public safety solicitations 21
which generated the contributions; or 22

(5) any other stipulation, condition, or remedy that will correct a violation 23
of this title. 24

(d) An agreement under this section is for conciliation purposes only and does not 25
constitute an admission by any party that the law has been violated. 26

(e) (1) It is a violation of this title to fail to adhere to any provisi on contained 27
in a settlement agreement. 28

(2) A failure of the Secretary of State or the Attorney General to enforce a 29
violation of any provision of a settlement agreement does not constitute a waiver of that or 30
any other provision, or of any right of the Secretary of State or the Attorney General. 31

SENATE BILL 4 5

(f) The EXCEPT IN THE ENFORCE MENT OF § 6–623 OF THIS TITLE , THE 1
Attorney General may sue in the circuit court for the county in which the alleged violation 2
occurred for an order that: 3

(1) restrains further violation of this title; 4

(2) restrains the defendant from making further charitable or public safety 5
solicitations in the State; 6

(3) except as provided under § 6–5A–11 of this title, recovers for the State 7
a civil penalty not to exceed $5,000 for each willful violation of this title; 8

(4) except as provided under § 6–5A–11 of this title, recovers for the State 9
a civil penalty not to exceed $3,000 for each grossly negligent violation of this title; 10

(5) enforces compliance with this title; or 11

(6) secures any other appropriate relief, including: 12

(i) refunds to donors; and 13

(ii) payment of the charitable or public safety contributions received 14
by the solicitor to charitable or public safety purposes or beneficiaries consistent with the 15
purposes represented or beneficiaries named in the charitable or public safety solicitations 16
which generated the contributions. 17

(g) (1) If the Secretary of State or the Attorney General issues a cease and 18
desist order to a person, the person may request a hearing from the Secretary of State. 19

(2) Within 30 days after a request is submitted, the Secretary of State shall 20
hold a hearing in accordance with Title 10, Subtitle 2 of the State Government Article. 21

6–402. 22

(a) A registration statement shall be on the form that the Secretary of State 23
provides. 24

(b) Except as provided in subsection (c) of this section, the registration statement 25
shall contain or be accompanied by: 26

(9) (i) a certification that all taxes due from the applicant to the State 27
or to Baltimore City or a county of the State for the preceding fiscal year have been paid, 28
and all taxes the applicant was required to collect and pay over to the State or to Baltimore 29
City or a county of the State for the preceding fiscal year have been collected and paid over; 30
or 31

6 SENATE BILL 4

(ii) a certification that the taxes due from the applicant to the State 1
or to Baltimore City or a county are under dispute and the dispute has not been finally 2
resolved; [and] 3

(10) A STATEMENT INDICATI NG THAT THE CHARITAB LE 4
ORGANIZATION DOES NOT AND WILL NOT PARTICIPATE IN OR INTERVENE IN , 5
INCLUDING THROUGH TH E PUBLICATION OR DIS TRIBUTION OF STATEME NTS, A 6
POLITICAL CAMPAIGN O N BEHALF OF OR IN OP POSITION TO A CANDID ATE FOR 7
PUBLIC OFFICE; AND 8

[(10)] (11) any other information tha t the Secretary of State requires by 9
regulation. 10

6–623. 11

(A) IN THIS SECTION , “DIRECTOR” MEANS THE DIRECTOR OF THE STATE 12
DEPARTMENT OF ASSESSMENTS AND TAXATION. 13

(B) (1) THIS EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS 14
SUBSECTION, THIS SECTION APPLIES TO EACH CHARITABLE ORGANIZATION THAT: 15

(1) (I) IS INCORPORATED OR O THERWISE ESTABLISHED UNDER 16
STATE LAW OR THE LAWS OF ANOTHER STATE; 17

(2) (II) IS AUTHORIZED TO REC EIVE DONATIONS THAT ARE 18
DEDUCTIBLE FROM FEDE RAL INCOME TAX UNDER § 170 OF THE INTERNAL 19
REVENUE CODE; AND 20

(3) (I) (III) 1. IS REQUIRED TO REGIS TER WITH THE 21
SECRETARY OF STATE UNDER SUBTITLE 4 OF THIS TITLE; OR 22

(II) 2. IF EXEMPT FROM THE REGISTRATION REQUIREMENT, 23
CONDUCTS BUSINESS OR OTHER ACTIVITIES IN THE STATE. 24

(2) NOTWITHSTANDING SUBSECTION (C)(2) OF THIS SECTION , THIS 25
SECTION DOES NOT APPLY TO A RELIGIOUS ORGANIZATION THAT IS AUTHORIZED TO 26
RECEIVE DEDUCTIBLE D ONATIONS THAT ARE SU BJECT TO THE AGGREGA TE 27
CONTRIBUTION LIMITATION UNDER § 170(B)(1)(A)(I) OF THE INTERNAL REVENUE 28
CODE. 29

(C) (1) A CHARITABLE ORGANIZAT ION MAY NOT PARTICIP ATE IN OR 30
INTERVENE IN A POLIT ICAL CAMPAIGN ON BEH ALF OF OR IN OPPOSIT ION TO A 31
CANDIDATE FOR PUBLIC OFFICE, INCLUDING THROUGH PU BLICATION OF OR 32
DISTRIBUTION OF STATEMENTS. 33
SENATE BILL 4 7

(2) PARAGRAPH (1) OF THIS SUBSE CTION SHALL BE INTER PRETED 1
AND APPLIED IN THE SAME MANNER AS THE PROHIBITION ON POLITICAL CAMPAIGN 2
ACTIVITY UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE WAS INTERPRETED 3
AND APPLIED BY THE INTERNAL REVENUE SERVICE AS OF JANUARY 19, 2025. 4

(D) (1) TO ENFO RCE THIS SECTION , IN ADDITION TO THE A UTHORITY 5
PROVIDED UNDER § 6–205 OF THIS TITLE AND SUBJECT TO PARAGRAPHS (2) AND (3) 6
OF THIS SUBSECTION , THE SECRETARY OF STATE OR THE ATTORNEY GENERAL 7
MAY: 8

(I) ASSESS CIVIL PENALTI ES IN ACCORDANCE WIT H 9
SUBSECTION (E) OF THIS SECTION; OR 10

(II) ORDER A REVOCATION IN ACCORDANCE WITH SUBSECTION 11
(F) OF THIS SECTION. 12

(2) (I) BEFORE ASSESSING A CI VIL PENALTY OR ORDER ING A 13
REVOCATION UNDER PAR AGRAPH (1) OF THIS SUBSECTION , THE SECRETARY OF 14
STATE OR THE ATTORNEY GENERAL SHALL ATTEMPT TO ENTER INTO , BY 15
MEDIATION WITH THE A PPARENT VIOLATORS AN D ANY REPRESENTATIVE OF THE 16
APPARENT VIOLATORS, A SETTLEMENT AGREEMENT UNDER § 6–205(B)(1) OF THIS 17
TITLE. 18

(II) A SETTLEMENT AGREEMENT UNDER § 6–205(B)(1) OF THIS 19
TITLE RESULTING FROM AN AP PARENT VIOLATION OF THIS SECTION MAY NOT 20
INCLUDE THE FOLLOWING STIPULATIONS OR CONDITIONS: 21

1. PAYMENT BY THE APPARENT VIOLATOR OF THE COST 22
OF THE INVESTIGATION; 23

2. PAYMENT BY THE APPARENT VIOLATOR OF REFUNDS 24
TO DONORS A COURT COULD ORDER UNDER THIS TITLE; OR 25

3. PAYMENT BY THE APPAR ENT VIOLATOR OF 26
CONTRIBUTIONS RECEIVED TO CHARITABLE OR PUBLIC SAFETY BENEFICIARIES OR 27
FOR CHARITABLE OR PU BLIC SAFETY PURPOSES CONSISTENT WITH THE 28
BENEFICIARIES NAMED OR PURPOSES REPRESEN TED IN THE CHARITABLE OR 29
PUBLIC SAFETY SOLICITATIONS WHICH GENERATED THE CONTRIBUTIONS. 30

(2) (3) (I) 1. IF THE SECRETARY OF STATE OR THE 31
ATTORNEY GENERAL FINDS OR HAS REASONABLE GROUNDS T O BELIEVE THAT A 32
CHARITABLE ORGANIZAT ION HAS VIOLATED THI S SECTION , THE SECRETARY OF 33
8 SENATE BILL 4

STATE OR THE ATTORNEY GENERAL SHALL PROVIDE WRITTEN NOTICE TO TH E 1
CHARITABLE ORGANIZATION. 2

2. SUBJECT TO SUBPARAGRA PH (II) OF THIS 3
PARAGRAPH, ISSUANCE OF A CEASE AND DESIST ORDER UND ER § 6–205 OF THIS 4
TITLE FOR A VIOLATIO N OF THIS SECTION I S A VALID FORM OF NO TICE IN 5
ACCORDANCE WITH THIS SUBPARAGRAPH. 6

(II) NOTICE REQUIRED UNDER THIS PARAGRAPH SHALL 7
INCLUDE A DESCRIPTION OF: 8

1. THE VIOLATION; 9

2. ANY AN OFFER FOR MEDIATION AS PROVIDED IN § 10
6–205(B)(1) OF THIS TITLE; 11

3. ANY CIVIL PENALTY ASSESS ED UNDER SUBSECTION 12
(E) OF THIS SECTION; 13

4. ANY REVOCATION OF A TAX–EXEMPT STATUS UNDER 14
SUBSECTION (F) OF THIS SECTION; AND 15

5. THE PENALTY AVOIDANC E PROCESS DESCRIBED IN 16
PARAGRAPH (3) OF THIS SUBSECTION; AND 17

6. THE APPEAL RIGHTS PROVIDED UN DER SUBSECTION 18
(G) OF THIS SECTION. 19

(3) (I) SUBJECT TO SUBPARAGRAPH (II) OF THIS PARAGRAPH, IF A 20
CHARITABLE ORGANIZATION RECEIVES NOTICE FOR VIOLATING THIS SECTION, THE 21
CHARITABLE ORGANIZAT ION MAY AVOID THE VI OLATION AND IMPOSITI ON O F A 22
PENALTY UNDER THIS SECTION IF THE CHARITABLE ORGANIZATION: 23

1. CAN SHOW THE CONDUCT GIVING RISE TO THE 24
VIOLATION WAS NOT AP PROVED OR AUTHORIZED BY THE CHIEF EXECUTI VE OR 25
GOVERNING BODY OF THE CHARITABLE ORGANIZATION; AND 26

2. PUBLICLY AND EFFECTIVELY DISCLAIM S THE 27
CONDUCT GIVING RISE TO THE VIOLATION NOT LATER THAN 7 DAYS AFTER 28
RECEIVING NOTICE OF THE VIOLATION. 29

SENATE BILL 4 9

(II) FOR PURPOSES OF SUBPA RAGRAPH (I) OF THIS 1
PARAGRAPH, NOTICE OCCURS ON THE EARLIER DATE OF WHEN THE CHARITABLE 2
ORGANIZATION: 3

1. HAS ACTUAL KNOWLEDGE OR REASONABLY SHOULD 4
HAVE KNOWN THAT THE CONDUCT GIVING RISE TO THE VIOLATION HAS OCCURRED 5
AND IS REASONABLY LIKELY TO BE IN VIOLATION OF THIS SECTION; OR 6

2. RECEIVES NOTICE IN A CCORDANCE WITH 7
PARAGRAPH (2) OF THIS SUBSECTION. 8

(E) (1) A CHARITABLE ORGANIZATION THAT VIOLATES TH IS SECTION IS 9
SUBJECT TO: 10

(I) FOR A FIRST VIOLATION, A WARNING; AND 11

(II) FOR A SECOND OR SUBS EQUENT VIOLATION , A CIVIL 12
PENALTY NOT EXCEEDING $5,000 $1,000 FOR EACH VIOLATION, IN ADDITION TO ANY 13
OTHER PENALTIES UNDER THIS SECTION. 14

(2) EACH CONSECUTIVE 5–DAY PERIOD THAT A VI OLATION 15
CONTINUES IS A SEPARATE VIOLATION. 16

(3) EACH CIVIL PENALTY ASSESSED UNDER THIS SUBSECTION SHALL 17
BE PAID TO THE GENERAL FUND OF THE STATE. 18

(F) (1) IF THE SECRETARY OF STATE AND THE ATTORNEY GENERAL, 19
ACTING JOINTLY , FIND OR HAVE REASONA BLE GROUNDS TO BELIE VE THAT A 20
CHARITABLE ORGANIZAT ION HAS WILLFULLY VI OLATED THIS SECTION , THE 21
SECRETARY OF STATE AND THE ATTORNEY GENERAL MAY ORDER A R EVOCATION 22
OF A TAX –EXEMPT STATUS DESCRIBED UNDER PARAGRAPH (3)(I) OF THIS 23
SUBSECTION. 24

(2) IF A CHARITABLE ORGAN IZATION FAILS TO TIM ELY REQUEST AN 25
APPEAL OF A REVOCATI ON IN ACCORDANCE WIT H SUBSECTION (G)(2) OF THIS 26
SECTION OR IF AN APP EAL OF THE REVOCATIO N IS HEARD AND DENIE D, THE 27
SECRETARY OF STATE SHALL PROMPTLY MAY PROVIDE WRITTEN NOTI CE TO THE 28
CHARITABLE ORGANIZATION, THE COMPTROLLER, AND THE DIRECTOR. 29

(3) (I) WITHIN 30 DAYS AFTER RECEIVING WRITTEN NOTICE FROM 30
THE SECRETARY OF STATE UNDER PARAGRAPH (2) OF THIS SUBSECTIO N, THE 31
COMPTROLLER AND THE DIRECTOR SHALL REVOKE FROM THE CHARITABLE 32
ORGANIZATION, AS APPLICABLE: 33
10 SENATE BILL 4

1. AN INCOME TAX EXEMPT ION THAT HAS BEEN 1
GRANTED UNDER § 10–104 OF THE TAX – GENERAL ARTICLE; 2

2. A SALES AND USE TAX EXEMPTION CERTIFICATE THAT 3
HAS BEEN ISSUED UNDER § 11–204 OF THE TAX – GENERAL ARTICLE; AND 4

3. A PROPERTY TAX EXEMP TION THAT HAS BEEN 5
GRANTED UNDER § 7–202 OR § 7–204 OF THE TAX – PROPERTY ARTICLE. 6

(II) THE COMPTROLLER AND THE DIRECTOR SHALL PROMPTLY 7
PROVIDE WRITTEN NOTI CE TO THE CHARITABLE ORGAN IZATION OF THE 8
REVOCATION OF ANY TA X–EXEMPT STATUS AND AN Y APPEAL RIGHTS AS M AY BE 9
AVAILABLE. 10

(4) (I) A EXCEPT AS PROVIDED IN SUBPARAGRAPH (II) OF THIS 11
PARAGRAPH, A REVOCATION UNDER THIS SECTION SHALL REMAIN IN EFFECT FOR 2 12
YEARS FROM THE DATE THE REVOCATION BECOMES EFFECTIVE. 13

(II) AFTER THE 2–YEAR REVOCATION PERIOD ELAPSES OR THE 14
SECRETARY OF STATE OR THE ATTORNEY GENERAL ENTERS INTO A SETTLEMENT 15
AGREEMENT UNDER § 6–205(B)(1) OF THIS TITLE WITH T HE CHARITABLE 16
ORGANIZATION, THE CH ARITABLE ORGANIZATIO N MAY REAPPLY TO THE 17
COMPTROLLER OR THE DIRECTOR FOR ANY TAX –EXEMPT STATUS THAT W AS 18
AFFECTED BY THE REVOCATION. 19

(G) A CHARITABLE ORGANIZATION THAT RECEIVES NOTICE OF A VIOLATION 20
UNDER THIS SECTION SHALL: 21

(1) WITHIN 15 DAYS AFTER RECEIPT OF A THE NOTICE THAT OFFERS 22
MEDIATION, ACCEPT THE OFFER FOR MEDIATION BY RESPOND ING TO THE 23
SECRETARY OF STATE; OR 24

(2) WITHIN 30 DAYS AFTER RECEIPT O F A NOTICE THAT ASSE SSES A 25
CIVIL PENALTY OR REVOKES A TAX–EXEMPT STATUS UNDER THIS SECTION: 26

(I) PAY THE AMOUNT OF EACH CIVIL PENALTY ASSESSED; OR 27

(II) REQUEST A HEARING WI TH THE SECRETARY OF STATE TO 28
BE HELD IN ACCORDANCE WITH TITLE 10, SUBTITLE 2 OF THE STATE GOVERNMENT 29
ARTICLE OR IN ACCORDANCE WITH § 6–205(G) OF THIS TITLE. 30

SENATE BILL 4 11

(H) THE SECRETARY OF STATE, IN CONSULTATION WITH THE ATTORNEY 1
GENERAL, THE COMPTROLLER, AND THE DIRECTOR, SHALL ADOPT REGULATIONS 2
TO CARRY OUT THIS SECTION, INCLUDING: 3

(1) PROCEDURES FOR PENAL TY AVOIDANCE UNDER S UBSECTION 4
(D)(3) OF THIS SECTION; AND 5

(2) CRITERIA TO B E USED IN DETERMININ G THE AMOUNT OF ANY 6
CIVIL PENALTIES ASSESSED UNDER SUBSECTION (E) OF THIS SECTION. 7

(I) ENFORCEMENT ACTION UN DER THIS SECTION DOE S NOT PRECLUDE 8
ENFORCEMENT ACTION UNDER TITLE 6.5 OF THIS ARTICLE BY THE SECRETARY OF 9
STATE OR THE ATTORNEY GENERAL. 10

6.5–101. 11

(a) In this title the following words have the meanings indicated. 12

(c) (1) “Charitable purpose” means the relief of poverty, the advancement of 13
education or religion, the promotion of health, the promotion of a governmental purpose, or 14
any other purpose whose achievement is beneficial to the community. 15

(2) “CHARITABLE PURPOSE ” DOES NOT INCLUDE , UNLESS 16
PERFORMED BY A RELIG IOUS ORGANIZATION TH AT IS AUTHORIZED TO RECEIVE 17
DEDUCTIBLE DONATIONS THAT ARE SUBJECT TO THE AGGREGATE CONTRIBUTION 18
LIMITATION UNDER § 170(B)(1)(A)(I) OF THE INTERNAL REVENUE CODE, 19
PARTICIPATING IN OR INTERVENING IN A POL ITICAL CAMPAIGN, INCLUDING THE 20
PUBLISHING OR DISTRIBUTING OF STATEMENTS, ON BEHALF OF OR IN OPPOSITION 21
TO A CANDIDATE FOR PUBLIC OFFICE IN THE SAME MANNER AS § 501(C)(3) OF THE 22
INTERNAL REVENUE CODE WAS INTERPRETED AND APPLIED BY THE INTERNAL 23
REVENUE SERVICE AS OF JANUARY 19, 2025, WITH RESPECT TO PROH IBITING 24
POLITICAL CAMPAIGN ACTIVITY. 25

6.5–103. 26

(c) The remedies under this section are in addition to and do not limit the powers 27
and duties of the Secretary of State and the Attorney General under § 6 –205 OR § 6–623 28
of this article or § 6.5–102 of this title. 29

Article – Tax – General 30

10–104. 31

(A) The income tax does not apply to the income of: 32

12 SENATE BILL 4

(1) a common trust fund, as defined in § 3 –501(b) of the Financial 1
Institutions Article; 2

(2) except as provided in SUBSECTION (B) OF THIS SECTION AND §§ 3
10–101(e)(3) of this subtitle and 10–304(2) of this title, an organization that is exempt from 4
taxation under § 408(e)(1) or § 501 of the Internal Revenue Code; 5

(3) a financial institution that is subject to the financial institution 6
franchise tax; 7

(4) a person subject to taxation under Title 6 of the Insurance Article; 8

(5) except as provided in § 10 –102.1 of this subtitle, a partnership, as 9
defined in § 761 of the Internal Revenue Code; 10

(6) except as provided in § 10–102.1 of this subtitle and § 10–304(3) of this 11
title, an S corporation; 12

(7) except as provided in § 10–304(4) of this title, an investment conduit or 13
a special exempt entity; or 14

(8) except as provided in § 10 –102.1 of this subtitle, a limited liability 15
company as defined under Title 4A of the Corporations and Associations Article to the 16
extent that the company is taxable as a partnership, as defined in § 761 of the Internal 17
Revenue Code. 18

(B) (1) IN THIS SUBSECTION , “CHARITABLE ORGANIZAT ION” HAS THE 19
MEANING STATED IN § 6–101 OF THE BUSINESS REGULATION ARTICLE, INCLUDING 20
FOR PURPOSES OF § 6–623 OF THE BUSINESS REGULATION ARTICLE. 21

(2) THIS SUBSECTION APPLI ES ONLY TO A CHARITA BLE 22
ORGANIZATION THAT IS SUBJECT TO THE REQUI REMENTS OF § 6–623 OF THE 23
BUSINESS REGULATION ARTICLE. 24

(3) (I) THE EXEMPTION PROVIDED UNDER SUBSECTION (A)(2) OF 25
THIS SECTION DOES NOT APPLY TO A CHARITABLE ORGANIZATION THAT IS EXEMPT 26
FROM TAXATION UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE IF THE 27
CHARITABLE ORGANIZAT ION PARTICIPATES IN OR INTERVENES IN , INCLUDING 28
THROUGH PUBLICATION OR DISTRIBUTION OF S TATEMENTS, A POLITICAL 29
CAMPAIGN ON BEHALF OF OR IN OPPOSITION TO A CANDIDATE FOR PUBLIC OFFICE. 30

(II) SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL BE 31
INTERPRETED AND APPL IED IN THE SAME MANN ER AS THE PROHIBITIO N ON 32
POLITICAL CAMPAIGN A CTIVITY UNDER § 501(C)(3) OF THE INTERNAL REVENUE 33
SENATE BILL 4 13

CODE WAS INTERPRETED AND APPLIED BY THE INTERNAL REVENUE SERVICE AS OF 1
JANUARY 19, 2025. 2

(4) IF A REVOCATION OF A CHARITABLE ORGANIZAT ION’S 3
TAX–EXEMPT STATUS IS ORD ERED IN ACCORDANCE W ITH § 6–623(F) OF THE 4
BUSINESS REGULATION ARTICLE, THE CHARITABLE ORGAN IZATION DOES NOT 5
QUALIFY FOR THE EXEMPTION UNDER SUBSECTION (A)(2) OF THIS SECTION UNTIL: 6

(I) THE TIME OF THE REVOCATION ELAPSES AS REQUIRED; OR 7

(II) THE SECRETARY OF STATE OR THE ATTORNEY GENERAL 8
ENTERS INTO A SETTLEMENT AGREEMENT UNDER § 6–205(B)(1) OF THE BUSINESS 9
REGULATION ARTICLE WITH THE CHARITABLE ORGANIZATION. 10

(5) PARAGRAPH (4) OF THIS SUBSECTION APPLIES BEGINNING WITH 11
THE TAXABLE YEAR THA T THE REVOCATION OF A CHARITABLE ORGANIZ ATION’S 12
TAX–EXEMPT STATUS IS ORD ERED UNDER § 6–623(F) OF THE BUSINESS 13
REGULATION ARTICLE. 14

11–204. 15

(a) [The] EXCEPT AS PROVIDED IN SUBSECTION (F) OF THIS SECTION, THE 16
sales and use tax does not apply to: 17

(1) a sale to a cemetery company, as described in § 501(c)(13) of the Internal 18
Revenue Code in effect on July 1, 1987; 19

(2) a sale to a credit union organized under the laws of the State or of the 20
United States; 21

(3) a sale to a nonprofit organization made to carry on its work, if the 22
organization: 23

(i) 1. is located in the State; 24

2. is located in an adjacent jurisdiction and provides its 25
services within the State on a routine and regular basis; or 26

3. is located in an adjacent jurisdiction whose law: 27

A. does not impose a sales or use tax on a sale to a nonprofit 28
organization made to carry on its work; or 29

B. contains a reciprocal exemption from sales and use tax for 30
sales to nonprofit organizations located in adjacent jurisdictions similar to the exemption 31
allowed under this subsection; 32
14 SENATE BILL 4

(ii) is a charitable, educational, or religious organization; 1

(iii) is not the United States; and 2

(iv) except for the American National Red Cross, is not a unit or 3
instrumentality of the United States; 4

(4) a sale, not exceeding $500, to a nonprofit incorporated senior citizens’ 5
organization made to carry on its work, if the organization: 6

(i) is located in the State; and 7

(ii) receives funding from the State or a political subdivision of the 8
State; 9

(5) a sale to a volunteer fire company or department or volunteer 10
ambulance company or rescue squad located in the State made to carry on the work of the 11
company, department, or squad; 12

(6) a sale of tangible personal property, a digital code, or a digital product 13
to a nonprofit parent–teacher association located in the State if the ass ociation makes the 14
purchase to contribute the property to a school to which a sale is exempt under item (3) of 15
this subsection or § 11–220 of this subtitle; 16

(7) a sale to a nonprofit organization made to carry on its work, if the 17
organization: 18

(i) is qualified as tax exempt under § 501(c)(4) of the Internal 19
Revenue Code; and 20

(ii) is engaged primarily in providing a program to render its best 21
efforts to contain, clean up, and otherwise mitigate spills of oil or other substances occurring 22
in United States coastal and tidal waters; or 23

(8) a sale to a bona fide nationally organized and recognized organization 24
of veterans of the armed forces of the United States or an auxiliary of the organization or 25
one of its units, if the organization is qualifie d as tax exempt under § 501(c)(4) or § 26
501(c)(19) of the Internal Revenue Code. 27

(b) [The] EXCEPT AS PROVIDED IN SUBSECTION (F) OF THIS SECTION, THE 28
sales and use tax does not apply to a sale by: 29

(1) a bona fide church or religious organization, if the sale is made for the 30
general purposes of the church or organization; 31

SENATE BILL 4 15

(2) a gift shop at a mental hospital that the Maryland Department of 1
Health operates; 2

(3) a hospital thrift shop that: 3

(i) is operated by all volunteer staff; 4

(ii) sells only donated articles; 5

(iii) contributes the profits from sales to the hospital with which the 6
shop is associated; and 7

(iv) is not operated in conjunction with a gift shop or another retail 8
establishment; 9

(4) a vending facility operated under th e Maryland Vending Program for 10
the Blind if: 11

(i) the facility is located on property held or acquired by or for the 12
use of the United States for any military or naval purpose; and 13

(ii) a post exchange or other tax –exempt concession is located and 14
operated on the same property; 15

(5) an elementary or secondary school in the State or a nonprofit 16
parent–teacher organization or other nonprofit organization within an elementary or 17
secondary school in the State for the sale of magazine subscriptions in a fund –raising 18
campaign, if the net proceeds are used solely for the educational benefit of the school or its 19
students, including a sale resulting from an agreement or contract with an organization to 20
participate in a fund–raising campaign for a percentage of the gross receipts under which 21
students act as agents or salespersons for the organization by selling or taking orders for 22
the sale; 23

(6) a parent –teacher organization or other organization within an 24
elementary or secondary school in the State or within a school system in the State; 25

(7) subject to subsection (e) of this section, a bona fide church, religious 26
organization, or other nonprofit organization exempt from taxation under § 501(c)(3) of the 27
Internal Revenue Code if: 28

(i) the sale is made at an auction sale; and 29

(ii) the proceeds of the sale are used to carry on the exempt purposes 30
of the church or organization; or 31

(8) a nonprofit organization exempt from taxation under § 501(c)(3) of the 32
Internal Revenue Code that maintains a memorial on property that is owned by the State 33
16 SENATE BILL 4

if the proceeds of the sale are used to maintain a memorial on property that is owned by 1
the State. 2

(c) To qualify as an organization to which a sale is exempt under subsection (a)(3) 3
or (5) of this section, the organization shall file an application for an exemption certificate 4
with the Comptroller. 5

(d) The Comptroller may treat the possession of an effective determination letter 6
of status under § 501(c)(3) or (13) of the Internal Revenue Code from the Internal Revenue 7
Service as evidence that an organization qualifies under subsection (a)(3) or (5) or (1) of this 8
section, respectively. 9

(e) For a sale described under subsection (b)(7) of this section that is not otherwise 10
exempt under this section, only that part of the sale price that qualifies for a deduction 11
under the federal income tax as a charitable contribution under the regulations an d 12
guidelines of the Internal Revenue Service is exempt from the sales and use tax under this 13
section. 14

(F) (1) IN THIS SUBSECTION , “CHARITABLE ORGANIZAT ION” HAS THE 15
MEANING STATED IN § 6–101 OF THE BUSINESS REGULATION ARTICLE, INCLUDING 16
FOR PURPOSES OF § 6–623 OF THE BUSINESS REGULATION ARTICLE. 17

(2) THIS SUBSECTION APPLI ES ONLY TO A CHARITA BLE 18
ORGANIZATION THAT IS SUBJECT TO THE REQUI REMENTS OF § 6–623 OF THE 19
BUSINESS REGULATION ARTICLE. 20

(3) (I) THE EXEMPTION PROVIDE D UNDER THIS SECTION DOES 21
NOT APPL Y TO A CHARITABLE OR GANIZATION THAT IS E XEMPT FROM TAXATION 22
UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE IF THE CHARITABL E 23
ORGANIZATION PARTICIPATES IN OR INTERVEN ES IN A POLITICAL CA MPAIGN ON 24
BEHALF OF OR IN OPPO SITION TO A CANDIDAT E FOR PUBLIC OFFICE , INCLUDING 25
THROUGH PUBLICATION OR DISTRIBUTION OF STATEMENTS. 26

(II) SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL BE 27
INTERPRETED AND APPL IED IN THE SAME MANN ER AS THE PROHIBITIO N ON 28
POLITICAL CAMPAIGN A CTIVITY UNDER § 501(C)(3) OF THE INTERNAL REVENUE 29
CODE WAS INTERPRETED AND APPLIED BY THE INTERNAL REVENUE SERVICE AS OF 30
JANUARY 19, 2025. 31

(4) IF A REVOCATION OF A CHARITABLE ORGANIZAT ION’S 32
TAX–EXEMPT STATUS IS ORD ERED IN ACCORDANCE W ITH § 6–623(F) OF THE 33
BUSINESS REGULATION ARTICLE, THE CHARITABLE ORGAN IZATION DOES NOT 34
QUALIFY FOR AN EXEMPTION UNDER THIS SECTION UNTIL: 35

(I) THE TIME OF THE REVOCATION ELAPSES AS REQUIRED; OR 36
SENATE BILL 4 17

(II) THE SECRETARY OF STATE OR THE ATTORNEY GENERAL 1
ENTERS INTO A SETTLEMENT AGREEMENT UNDER § 6–205(B)(1) OF THE BUSINESS 2
REGULATION ARTICLE WITH THE CHARITABLE ORGANIZATION. 3

Article – Tax – Property 4

7–202. 5

(a) In this section: 6

(1) “fraternal organization” means any organization that: 7

(i) is conducted solely for the benefit of its members and its 8
beneficiaries; 9

(ii) is operated on a lodge system with a ritualistic activity; and 10

(iii) has a representative form of government; 11

(2) “fraternal organization” includes a sororal organization; and 12

(3) “fraternal organization” does not include: 13

(i) any college or high school fraternity or sorority; or 14

(ii) any other fraternal or sororal organization the membership of 15
which is restricted wholly or largely to students or graduates of an educational institution 16
or a professional school. 17

(b) (1) Except as p rovided in [subsection] SUBSECTIONS (c) AND (E) of this 18
section and § 6 –302(d) of this article and subject to § 7 –204.1 of this subtitle, property is 19
not subject to property tax if the property: 20

(i) is necessary for and actually used exclusively for a charitable or 21
educational purpose to promote the general welfare of the people of the State, including an 22
activity or an athletic program of an educational institution; and 23

(ii) is owned by: 24

1. a nonprofit hospital; 25

2. a nonprofit charitable, fraternal, educational, or literary 26
organization including: 27

A. a public library that is authorized under Title 23 of the 28
Education Article; and 29
18 SENATE BILL 4

B. a men’s or women’s club that is a nonpolitical and nonstock 1
club; 2

3. a corporation, limited liability company, or trustee that 3
holds the property for the sole benefit of an organization that qualifies for an exemption 4
under this section; or 5

4. a nonprofit housing corporation. 6

(2) The exemption under paragraph (1)(ii)1 of this subsection includes any 7
personal property initially leased by a nonprofit hospital for more than 1 year under a lease 8
that is noncancellable except for cause. 9

(c) (1) This subsection does not apply to real property owned by a nonprofit 10
charitable museum that: 11

(i) is open to the public; and 12

(ii) does not charge an admission fee. 13

(2) Except for a nonprofit hospital, not more than 100 acres of real property 14
owned by an exempt organization and appurtenant to the premises of the exempt 15
organization is exempt from property tax, if the property is located outside of a municipal 16
corporation or Baltimore City. 17

(3) Not more than 100 acres of real property of a nonprofit hospital that is 18
appurtenant to the hospital is exempt from property tax. 19

(d) (1) Notwithstanding § 7 –104 of this title and after filing the application 20
provided by § 7 –103 of this title, property tax on any property that is transferred to a 21
nonprofit charitable organization is abated from the date during the taxable year when the 22
instrument transferring title to the organization is recorded if: 23

(i) the property is transferred to a nonprofit charitable organization 24
qualified under § 501(c)(3) of the Internal Revenue Code; 25

(ii) the property becomes exempt under this section; 26

(iii) the pr operty has a value less than $300,000 as listed in the 27
records of the Department on the date when the instrument transferring title to the 28
organization is recorded; and 29

(iv) the nonprofit charitable organization provides the Department 30
evidence of the property tax it actually paid or reimbursed at the property settlement. 31

SENATE BILL 4 19

(2) The amount of property tax abated under this subsection may not 1
exceed the amount of property tax actually paid or reimbursed by an eligible organization 2
at the property settlement. 3

(E) (1) IN THIS SUBSECTION , “CHARITABLE ORGANIZAT ION” HAS THE 4
MEANING STATED IN § 6–101 OF THE BUSINESS REGULATION ARTICLE, INCLUDING 5
FOR PURPOSES OF § 6–623 OF THE BUSINESS REGULATION ARTICLE. 6

(2) THIS SUBSECTION APPLI ES ONLY TO A CHARITA BLE 7
ORGANIZATION THAT IS SUBJECT TO THE REQUI REMENTS OF § 6–623 OF THE 8
BUSINESS REGULATION ARTICLE. 9

(3) (I) THE EXEMPTION PROVIDE D UNDER THIS SECTION DOES 10
NOT APPLY TO A CHARI TABLE ORGANIZATION T HAT IS EXEMPT FROM T AXATION 11
UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE IF THE CHARITABL E 12
ORGANIZATION PARTICI PATES IN OR INTERVEN ES IN , INCLUDING THROUGH 13
PUBLICATION OR DISTR IBUTION OF STATEMENT S, A POLITICAL CAMPAIGN ON 14
BEHALF OF OR IN OPPOSITION TO A CANDIDATE FOR PUBLIC OFFICE. 15

(II) SUBPARAGRAPH (I) OF THI S PARAGRAPH SHALL BE 16
INTERPRETED AND APPL IED IN THE SAME MANN ER AS THE PROHIBITIO N ON 17
POLITICAL CAMPAIGN A CTIVITY UNDER § 501(C)(3) OF THE INTERNAL REVENUE 18
CODE WAS INTERPRETED AND APPLIED BY THE INTERNAL REVENUE SERVICE AS OF 19
JANUARY 19, 2025. 20

(4) IF A REVOCATION OF A CHAR ITABLE ORGANIZATION ’S 21
TAX–EXEMPT STATUS IS ORD ERED IN ACCORDANCE W ITH § 6–623(F) OF THE 22
BUSINESS REGULATION ARTICLE, THE CHARITABLE ORGAN IZATION DOES NOT 23
QUALIFY FOR THE PROPERTY TAX EXEMPTION UNDER THIS SECTION UNTIL: 24

(I) THE TIME OF THE REVOCATION ELAPSES AS REQUIRED; OR 25

(II) THE SECRETARY OF STATE OR THE ATTORNEY GENERAL 26
ENTERS INTO A SETTLEMENT AGREEMENT UNDER § 6–205(B)(1) OF THE BUSINESS 27
REGULATION ARTICLE WITH THE CHARITABLE ORGANIZATION. 28

(5) PARAGRAPH (4) OF THIS SUBSECTION APPLIES BEGINNING WITH 29
THE TAXABLE YEAR THA T THE REVOCATION OF A CHARITABLE ORGANIZ ATION’S 30
TAX–EXEMPT STATUS IS ORD ERED UNDER § 6–623(F) OF THE BUSINESS 31
REGULATION ARTICLE. 32

7–204. 33

20 SENATE BILL 4

(A) Except as provided in § 6–302(d) of this article and subject to § 7–204.1 of this 1
subtitle AND EXCEPT AS PROVID ED IN SUBSECTION (B) OF THIS SECTION , property 2
that is owned by a religious group or organization is not subject to property tax if the 3
property is actually used exclusively for: 4

(1) public religious worship; 5

(2) a parsonage or convent; or 6

(3) educational purposes. 7

(B) (1) IN THIS SUBSECTION , “CHARITABLE ORGANIZAT ION” HAS THE 8
MEANING STATED IN § 6–101 OF THE BUSINESS REGULATION ARTICLE, INCLUDING 9
FOR PURPOSES OF § 6–623 OF THE BUSINESS REGULATION ARTICLE. 10

(2) THIS SUBSECTION APPLI ES ONLY TO A CHARITA BLE 11
ORGANIZATION THAT IS SUBJECT TO THE REQUI REMENTS OF § 6–623 OF THE 12
BUSINESS REGULATION ARTICLE. 13

(3) (I) THE EXEMPTION PROVIDE D UNDER THIS SECTION DOES 14
NOT APPLY TO A CHARI TABLE ORGA NIZATION THAT IS EXE MPT FROM TAXATION 15
UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE IF THE CHARITABL E 16
ORGANIZATION PARTICIPATES IN OR INTERVEN ES IN A POLITICAL CA MPAIGN ON 17
BEHALF OF OR IN OPPO SITION TO A CANDIDAT E FOR PUBLIC OFFICE , INCLUDING 18
THROUGH PUBLICATION OR DISTRIBUTION OF STATEMENTS. 19

(II) SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL BE 20
INTERPRETED IN THE S AME MANNER AS THE PR OHIBITION ON POLITIC AL 21
CAMPAIGN ACTIVITY UN DER § 501(C)(3) OF THE INTERNAL REVENUE CODE WAS 22
INTERPRETED AND APPLIED BY THE INTERNAL REVENUE SERVICE AS OF JANUARY 23
19, 2025. 24

(4) IF A REVOCATION OF A CHARITABLE ORGANIZAT ION’S 25
TAX–EXEMPT STATUS IS ORD ERED IN ACCORDANCE W ITH § 6–623(F) OF THE 26
BUSINESS REGULATION ARTICLE, THE CHARITABLE ORGAN IZATION DOES NOT 27
QUALIFY FOR THE PROPERTY TAX EXEMPTION UNDER THIS SECTION UNTIL: 28

(I) THE TIME OF THE REVOCATION ELAPSES AS REQUIRED; OR 29

(II) THE SECRETARY OF STATE OR THE ATTORNEY GENERAL 30
ENTERS INTO A SETTLEMENT AGREEMENT UNDER § 6–205(B)(1) OF THE BUSINESS 31
REGULATION ARTICLE WITH THE CHARITABLE ORGANIZATION. 32

SENATE BILL 4 21

(5) PARAGRAPH (4) OF THIS SUBSECTION APPLIES BEGINNING WITH 1
THE TAXABLE YEAR THA T THE REVOCATION OF A CHARITABLE ORGANIZ ATION’S 2
TAX–EXEMPT STATUS IS ORD ERED UNDER § 6–623(F) OF THE BUSINESS 3
REGULATION ARTICLE. 4

SECTION 2. AND BE IT FURTHER ENACTED, That: 5

(a) In this section, “Johnson Amendment” means the provision contained in § 6
501(c)(3) of the Internal Revenue Code that prohibits a federally tax –exempt entity from 7
participating in or intervening in any political campaig n on behalf of or in opposition to a 8
candidate for public office, including through publication or distribution of statements, as 9
that provision was interpreted and applied by the Internal Revenue Service as of January 10
19, 2025. 11

(b) Section 1 of this Act is contingent on any action by the President of the United 12
States or the Internal Revenue Service or change in federal law that, in whole or in part, 13
prevents the enforcement of, or renders null and void, the Johnson Amendment with 14
respect to any charitab le organization to which the provisions of § 6 –623 of the Business 15
Regulation Article apply. 16

(c) (1) The Attorney General shall monitor action by the federal government 17
to determine whether any action or change occurs as described under subsection (b) of this 18
section. 19

(2) If the Attorney General determines an action or change occurs as 20
described under subsection (b) of this section, the Attorney General shall notify the 21
Department of Legislative Services within 5 days after the determination is made. 22

(d) If the Department of Legislative Services receives notice from the Attorney 23
General as described under subsection (c)(2) of this section, Section 1 of this Act shall take 24
effect on the date the notice is received by the Department of Legislative Services. 25

SECTION 3. AND BE IT FURTHER ENACTED, That, subject to Section 2 of this 26
Act, this Act is an emergency measure, is necessary for the immediate preservation of the 27
public health or safety, has been passed by a yea and nay vote supported by three–fifths of 28
all the members elected to each of the two Houses of the General Assembly, and shall take 29
effect from the date it is enacted. 30