Gov. vetoes bill on tax exemptions for non-profits tied to insurrection

SAN FRANCISCO — Gov. Gavin Newsom has vetoed a bill by a state senator from San Francisco that sought to strip tax-exempt status from any nonprofits in California that participated in or incited insurrection like the attack on the U.S. Capitol on Jan. 6, 2021.

Senate Bill 834, authored by state Sen. Scott Wiener (D-San Francisco) would allow the state’s Franchise Tax Board to revoke the California tax-exempt status for nonprofits “that participated in or aided the insurrection … or that support current and future efforts to overthrow our democratically-elected government,” Wiener’s office said in announcing the bill earlier this year.

The attack on the Capitol last year by supporters of former President Donald Trump led to the deaths of five people and injured many others while Congress was certifying the victory of President Joe Biden over Trump in the November 2020 election.

Wiener’s office identified the “Oath Keepers,” a national militia movement tied to the Jan. 6 attack, as an example of a group that has an “educational foundation” with tax-exempt branches in several states, although not one in California.

The language in SB 834 said the offending nonprofits would be identified as such by the state attorney general, but the veto message sent by Newsom late Thursday rejected that proposal.

“Without question, extremist groups that participate in anti-government acts such as those that took place during the insurrection on January 6, 2021 should be renounced and investigated for their participation,” Newsom wrote. “However, these are issues that should be evaluated through the judicial system with due process and a right to a hearing.”

In response to the veto by Newsom, Wiener said Friday that he must “respectfully disagree” with the governor’s decision.

“What the Governor is suggesting — mandatory judicial oversight of tax-exempt status revocation — is unprecedented,” Wiener wrote.

“Tax-exempt status is a privilege, not a right, and we must be clear on where California stands when it comes to organizations trying to undermine our democratic system. January 6 was a dark day in our nation’s history, and we should do everything in our power to prevent an insurrection from happening again,” he wrote.

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