I’M NOT A TAX LAWYER, BUT I PLAY ONE ON INSTAPUNDIT: JustTheNews.com is reporting that a bill making its way through the California legislature would allow a nonprofit organization’s tax-exempt status to be revoked if the state’s Attorney General determines the organization has “actively engaged in, or incited the active engagement in, acts or conspiracies defined as criminal under specified federal law.”

The “No Tax Exemption for Insurrection Act” is a reaction to the January 6 riots in D.C. When I read the text of the bill, it seems to me that if passed in its present form, it would be a sitting duck for constitutional challenge. For one thing the geniuses in California don’t seem to realize that under U.S. tax law, there are several kinds of “tax-exempt” status. Some, like 501(c) 3 organizations are already prohibited from being involved in political activities. But others, like political organizations registered as 501(c)4, 5, or 6 charities may legally be both tax-exempt and involved in political activity.

The problem as I see it, is that the California bill, by overbroadly using the phrase “tax-exempt” rather than specifying which kind of text-exempt organization” most likely fails to pass constitutional scrutiny under the 14th Amendment by  treating entities differently based on their political stance, and “void for vagueness” under Supreme Court rulings such as Grayned v. City of Rockford:

“It is a basic principle of due process that an enactment is void for vagueness if its prohibitions are not clearly defined. Vague laws offend several important values. First, because we assume that man is free to steer between lawful and unlawful conduct, we insist that laws give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly. Vague laws may trap the innocent by not providing fair warning. Second, if arbitrary and discriminatory enforcement is to be prevented, laws must provide explicit standards for those who apply them. […] Third, but related, where a vague statute “abut[s] upon sensitive areas of basic First Amendment freedoms, it “operates to inhibit the exercise of those freedoms.” Uncertain meanings inevitably lead citizens to ” `steer far wider of the unlawful zone’ . . . than if the boundaries of the forbidden areas were clearly marked.”

Here’s a fun fact: Although it is anticipated that such a bill would target conservative groups, ironically, it could just as easily be used to strip liberal advocacy groups of the same rights. A cursory search indicates that at least eight Planned Parenthood entities operate in California under 501(c)4, a category that allows legislative advocacy.

For now at least.