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501(c) 3 organizations are exempt from paying US Federal corporate income tax. For The state of Colorado if you have not already done so, you may want to apply for exempt status through the Colorado Dept. of Revenue. This may include exemptions from income, property, sales, and other state taxes. Typically states provide an exemption for 501(c)3 groups from having to pay sales tax on goods and merchandise. You can visit their website at www.colorado.gov/revenue, or give them a call at XXX.XXX.XXXX for further clarification. For more detail regarding the federal side of matters, you can refer to IRS Publication 557.