Colorado Booster Club Filing Requirements

Forming a Nonprofit Corporation in Colorado

1. File nonprofit Articles of Incorporation online ($50), adding the purpose and dissolution language the IRS requires.
2. Name a registered agent (the person who accepts legal papers for the club) with a Colorado street address.
3. Record the incorporation month; it sets the periodic report month.

Periodic report

Every nonprofit corporationNonprofit corporationA legal entity created by filing articles of incorporation with the state, separate from the parents who run it. It can open a bank account, sign contracts, and apply for 501(c)(3) status.All terms files a Periodic Report ($25 online) each year, from two months before to two months after its periodic report month. After that the status becomes “Delinquent,” a $50 late penalty applies, and curing delinquency costs $100.

State Tax Exemption

Colorado follows federal status for income tax; there is no state application and no fee. A booster club with unrelated business income (income from a regular business unrelated to its purpose) files a Colorado return for that income. The treasurer confirms the current form with the Department of Revenue.

Sales Tax

Purchases

Colorado exempts purchases by charitable organizations from state and state-administered local sales taxes when the purchases are part of regular charitable activities. The club applies for an exemption certificate on Form DR 0715 with its IRS determination letter; the Department may review whether the club is charitable. Home rule cities (cities that collect their own sales tax) set their own rules.

Fundraiser sales

Department of Revenue rules (1 CCR 201-4, implementing Colorado Revised Statutes 39-26-718 and 39-26-725) give booster clubs two paths:

• School-support sales. Sales are exempt from state sales tax when (a) the school serves kindergarten through twelfth grade, (b) the seller is a booster club or other group whose primary purpose is supporting a school activity, a parent-teacher organization, the school, or a student group, and (c) all proceeds, minus the actual cost of the goods, are donated to the school or a school-approved student organization. The rule gives concession sales by a booster club as an example. The club does not need to be a charitable organization for this exemption, and the occasional-sale limits do not apply.
• Occasional sales. A charitable organization holding a Colorado exemption certificateSales tax exemption certificateA state form a qualifying organization gives a seller to buy without paying sales tax. Many states do not exempt nonprofit purchases, so whether a club can use one varies by state.All terms may make tax-exempt occasional sales. House Bill 19-1323 (effective August 2, 2019) raised the exempt amount to $45,000 of funds raised per calendar year and removed the earlier 12-day limit.

State-administered cities and counties may choose whether to adopt these exemptions, and home rule cities decide for themselves. Where local tax applies, the club needs a sales tax license; the Department’s publication DR 1002 lists local rules.

Charitable Solicitation Registration

The Colorado Charitable Solicitations Act (Colorado Revised Statutes Title 6, Article 16) requires charitable organizations to register with the Secretary of State before soliciting in Colorado. Online donation pages count when they target Colorado residents or bring in contributions on a repeated basis.

• Fees. $10 for a new registration and $10 for each annual renewal.
• Timing. Registration lasts until the annual financial report is due: the earlier of the 15th day of the 8th month after fiscal yearFiscal yearThe club’s 12-month accounting year, set in the bylaws. Many booster clubs use July 1 through June 30 to match the school year, and the club’s filing deadlines count from the day it ends.All terms end or the club’s IRS Form 990 due date. For a June 30 year end without an IRS extension, that is November 15. A three-month extension is available.
• Financial report. A state form or a copy of the club’s Form 990.
• Exemption. A charity is exempt if it does not raise more than $25,000 in gross revenue in its fiscal year (excluding grants from government or other 501(c)(3) organizations), or does not receive contributions from more than 10 persons. The exemption does not apply to a club using a paid solicitor. Filing an exemption claim is optional.
• Fines. Up to $100 a year for a late renewal or report, and up to $300 a year for soliciting before registering.

Gross revenue includes concessions and merchandise, not only donations, so most active booster clubs pass $25,000.

Raffles and Gaming

Raffles are legal in Colorado only under a bingo-raffle license from the Secretary of State. Silent auctions do not need a license.

• Eligibility. Only nonprofit organizations that have existed in Colorado for five or more years, with a dues-paying membership throughout that period. Qualifying types include charitable, educational, and fraternal organizations.
• Fees. $100 for the license. Quarterly administrative fees apply to proceeds: none under $5,000; 0.45 percent online from $5,000 to $99,999; 0.55 percent online at $100,000 or more.
• Quarterly reports. Due April 30, July 31, October 31, and January 31, even with no activity.
• Renewal. Not issued before November 1 for the next calendar year, and only after the third-quarter report is filed.
• Tickets. A raffle with total prizes over $1,000 requires submitting a voided printed ticket for review (five to seven working days) before sales begin.
• Online sales. Allowed, if every card payment goes directly into the club’s bingo-raffle account.
• Prizes and pay. No alcoholic beverage prizes. No one may be paid for running the games.

Annual Compliance Calendar for Colorado