Does a 501(c)(3), (c)(4), or (c)(6) organization that runs ads telling Virginia voters to 'say no to' a named candidate have to file independent-expenditure reports?

Plain-English summary

Delegate Israel O'Quinn described a particular pattern of advertisement: a tax-exempt organization runs print, broadcast, or digital ads that (a) name a candidate, (b) list the candidate's votes on issues, (c) tell viewers to "say NO to" that candidate, (d) carry a "paid for by" disclaimer naming the tax-exempt organization, (e) declare the ad is "in support of" the named opponent, and (f) include no candidate-authorization disclaimer. He asked whether the tax-exempt organization has to file independent-expenditure reports under Virginia's Campaign Finance Disclosure Act of 2006.

Attorney General Jason Miyares answered yes. The Act applies to "any person" making independent expenditures over the threshold, defined as expenditures made for "expressly advocating the election or defeat of a clearly identified candidate." 501(c)(3), (c)(4), and (c)(6) organizations are excluded from "person" only "to the extent" their activities "do[] not advocate or endorse the election or defeat of a particular candidate." Once they cross into express advocacy, the exemption falls away and the regular reporting rules apply.

The opinion's principal move is to reject the magic-words test. Express advocacy does not require the words "vote for," "elect," or "defeat." Quoting a 1995 AG opinion: there is "no rational basis for confining [the statute] to writings that expressly use such words. . . . [Any such] requirement . . . invites abuse and attempts at circumvention through clever language manipulation." The Department of Elections regulation at 1 Va. Admin. Code § 20-90-30 codifies a broader test: a communication is express advocacy if "taken as a whole and with limited reference to external events," it could only be interpreted by a reasonable person as advocating election or defeat. That captures the "say no to X" / "in support of Y" pattern.

The opinion calls out that on these facts the organization may also qualify as a Political Action Committee (PAC) under § 24.2-945.1(A), which would trigger additional registration and reporting obligations under §§ 24.2-949.1 through 24.2-953.5. The opinion does not decide PAC status because the facts are incomplete; it just flags the issue.

What this means for you

If you run a 501(c)(3), (c)(4), or (c)(6) and want to do issue advocacy

Stay clear of express advocacy if you want to keep the Act's reporting exemption. You can describe a candidate's voting record. You cannot pair that with "say no to" or "in support of" framing. The reasonable-person test means a reasonable reader cannot have one and only one election-related interpretation. If you want to engage in express advocacy, accept that you must file independent-expenditure reports once you cross $1,000 (statewide) or $200 (other elections), and consider whether the activity puts your federal tax-exempt status at risk. 501(c)(3) organizations face additional federal limits on political activity that this opinion does not address.

If you are a board member or executive director of a c(3) considering edge-of-the-line advocacy

The federal IRS rules on c(3) electioneering are stricter than Virginia's reporting rules. A c(3) running "say no to" ads risks loss of federal exemption. Consult both campaign-finance counsel and federal tax counsel before publishing.

If you are a c(4) or c(6) running heavy issue-advocacy programs

You can do unlimited express advocacy under federal tax law (subject to the limit that political activity cannot be your "primary" purpose), but every dollar spent on express advocacy in Virginia elections triggers state-level disclosure once you cross the threshold. Set up your bookkeeping to track election-cycle express-advocacy spending separately from non-election issue advocacy.

If you are a candidate targeted by an attack ad

Save the ad. Note the date of distribution, the named "paid for by" entity, and any "in support of" language. Check the State Board of Elections (statewide office) or your county general registrar (local office) for the entity's independent-expenditure report. If no report is on file, file a complaint with the State Board of Elections. The opinion confirms the duty exists; non-filing is enforceable.

If you are a campaign finance attorney

The opinion endorses 1 Va. Admin. Code § 20-90-30's reasonable-person test as the operative standard for "expressly advocating," not the Buckley magic-words rule. That places Virginia in the broader-test camp (consistent with FEC v. Wisconsin Right to Life nuances) rather than the strict-magic-words camp. Use the opinion to push back against organizations claiming the c(3)/(c)(4)/(c)(6) exemption while running clearly persuasive election ads.

If you serve on the State Board of Elections or a general registrar's office

You will likely see more reports as a result of this opinion. Train staff on the test for express advocacy and the threshold amounts ($1,000 statewide, $200 other). Be prepared to handle complaints alleging non-filing.

Common questions

Q: Is "say no to [candidate]" automatically express advocacy?
A: The opinion treats it as express advocacy in combination with naming the opposing candidate as "supported." Standing alone, "say no to [candidate name]" arguably crosses the line, but the AG's reasoning relied on the full ad pattern, including the "in support of" language and the candidate's voting record.

Q: What about ads that only describe a candidate's voting record without telling viewers what to do?
A: A pure record-of-votes ad with no electoral call-to-action is more defensible as issue advocacy. The reasonable-person test still applies, but a record-only ad lacks the operative cue that makes the message "unmistakable, unambiguous, and suggestive of only one meaning."

Q: Does this affect 527 organizations?
A: 527 political organizations under federal tax law are not within the c(3)/(c)(4)/(c)(6) exemption to begin with. They have always been subject to Virginia's reporting requirements as "persons" under § 24.2-945.1(A). The opinion does not change that.

Q: What is the threshold for independent-expenditure reporting?
A: $1,000 in aggregate during an election cycle for statewide offices and General Assembly offices; $200 for other elections (including local offices).

Q: What if the organization spends below the threshold?
A: No reporting requirement. But if the organization continues spending across multiple election cycles, the cumulative effect can quickly cross the threshold. Track cycle-by-cycle.

Q: Are the penalties really class 1 misdemeanor for willful violations?
A: Yes. § 24.2-953(D) makes willful violations a Class 1 misdemeanor. Civil penalties for non-willful violations cap at $100 (general violations) or $500 (incomplete reports).

Q: Does this opinion conflict with Buckley v. Valeo?
A: Buckley required disclosure rules to use clear standards to avoid First Amendment vagueness. The Department of Elections' regulation provides a "reasonable person" test that has been upheld in similar federal frameworks. The opinion notes Buckley's two government interests (informing the electorate, election integrity) without extending the magic-words rule.

Q: What if the ad runs only on social media targeting Virginia residents?
A: The Act applies to advertisements regardless of medium. Digital ads targeting Virginia voters are squarely within scope.

Background and statutory framework

Virginia's Campaign Finance Disclosure Act of 2006 (CFDA, codified at §§ 24.2-945 to -953.5) regulates the receipt and expenditure of money for the purpose of expressly advocating the election or defeat of a clearly identified candidate. The Act covers all Virginia elections except elections for federal office and certain town offices.

The Act's "person" definition (§ 24.2-945.1(A)) is broad: any individual or corporation, partnership, business, labor organization, membership organization, association, cooperative, or other like entity. The c(3)/(c)(4)/(c)(6) carve-out (§ 24.2-945.1(B)) is narrow: it applies only "[f]or the purpose of applying the filing and reporting requirements" and only to the extent the organization "does not advocate or endorse the election or defeat of a particular candidate, group of candidates, or the candidates of a particular political party."

When the carve-out applies, the organization is exempt from the independent-expenditure reporting otherwise required by § 24.2-945.2(A). When the carve-out does not apply (because the organization engaged in express advocacy), the regular reporting rules apply: independent-expenditure reports filed with the State Board of Elections (statewide and General Assembly offices) or the appropriate general registrar (local offices).

The express-advocacy test comes from 1 Va. Admin. Code § 20-90-30. It expressly does not require "magic words" like "vote for" or "defeat." A communication is express advocacy when "taken as a whole and with limited reference to external events, such as the proximity to the election, [it] could only be interpreted by a reasonable person as containing advocacy of the election or defeat of one or more clearly identified candidates because (i) the electoral portion of the communication is unmistakable, unambiguous, and suggestive of only one meaning and (ii) reasonable minds could not differ as to whether it encourages actions to elect or defeat one or more clearly identified candidates."

The opinion's PAC footnote is important. § 24.2-945.1(A) defines a PAC as "any organization, person, or group of persons, established or maintained to receive and expend contributions for the primary purpose of expressly advocating the election or defeat of a clearly identified candidate." If express advocacy is the organization's primary purpose, the organization is a PAC and must file additional statements under §§ 24.2-949.1 through 24.2-949.5, with separate penalties under §§ 24.2-953.1 through 24.2-953.3.

Citations

• Va. Code Ann. §§ 24.2-945 to -953.5 (Campaign Finance Disclosure Act of 2006)
• Va. Code Ann. §§ 24.2-945(A), 24.2-945.1(A), 24.2-945.1(B), 24.2-945.2(A), 24.2-945.2(B)
• Va. Code Ann. §§ 24.2-949.1, 24.2-949.2, 24.2-949.5
• Va. Code Ann. §§ 24.2-953(B), (C), (D); 24.2-953.1, 24.2-953.2, 24.2-953.3
• 26 U.S.C. §§ 501(c)(3), (c)(4), (c)(6)
• 1 Va. Admin. Code § 20-90-30
• Buckley v. Valeo, 424 U.S. 1 (1976)
• Llewellyn v. White, 297 Va. 588 (2019)
• Berry v. Bd. of Supvrs., 884 S.E.2d 515 (Va. 2023)
• Chesapeake Hosp. Auth. v. State Health Comm'r, 301 Va. 82 (2022)
• 1995 Op. Va. Att'y Gen. 170
• 2013 Op. Va. Att'y Gen. 203
• 2021 Op. Va. Att'y Gen. No. 21-022

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2023/23-055-O'Quinn-issued.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General

Jason S. Miyares
Attorney General
October 18, 2023

The Honorable Israel O'Quinn
Member, House of Delegates
Post Office Box 16325
Bristol, Virginia 24209

Dear Delegate O'Quinn:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You inquire regarding the application of Virginia's Campaign Finance Disclosure Act of 2006 (the Act) to the dissemination of print, broadcast or digital advertisements in Virginia by a tax-exempt organization. Specifically, you ask whether a tax-exempt organization that disseminates such material expressly advocating for the election or defeat of a clearly identified candidate must comply with the independent expenditure reporting obligations imposed by the Act.

Response

It is my opinion that a tax-exempt organization that engages in express advocacy of a clearly defined candidate must comply with the Act's reporting requirements and is subject to the penalties set forth in the law for failure to comply.

Background

You present a scenario in which an organization holding a tax-exempt status under § 501(c)(3), 501(c)(4), or 501(c)(6) of the United States Internal Revenue Code disseminates print, broadcast, or digital advertisements in Virginia. As you describe them, the advertisements (i) clearly identify a candidate for election; (ii) list the candidate's votes on specific issues; (iii) include a "call to action" that enlists the recipient or reader to "say NO to [candidate name]"; (iv) contain a "paid for by" disclaimer that provides the name of the tax-exempt organization; (v) state the advertisement is "in support of" the name of a clearly identified candidate that is running as the opponent to the candidate that is the target of or subject of the advertisement; and (vi) contain no statement disclosing that they were authorized by any candidate. The advertisements are being distributed while a general election related to the named candidates is ongoing.

Applicable Law and Discussion

Virginia's Campaign Finance Disclosure Act of 2006 applies "to all elections held in Virginia." The Act's provisions "serve . . . to regulate the receipt and expenditure of money intended for expressly advocating the election or defeat of a clearly identified candidate." To that end, the Act directs that "[a]ny person . . . that makes independent expenditures" totaling over a certain amount during an election cycle, "shall maintain records and report . . . all such independent expenditures made for the purpose of expressly advocating the election or defeat of a clearly identified candidate." Penalties can be imposed for failure to timely file the required reports.

The Act broadly defines "person" as "any individual or corporation, partnership, business, labor organization, membership organization, association, cooperative, or other like entity." The Act further provides, however, that "[f]or the purpose of applying the filing and reporting requirements," the definition of "person" does "not include an organization holding tax-exempt status under § 501(c)(3), 501(c)(4), or 501(c)(6) of the United States Internal Revenue Code . . . ." This exclusion from the definition applies, however, only to the extent a tax-exempt organization, "in providing information to voters, does not advocate or endorse the election or defeat of a particular candidate, group of candidates, or the candidates of a particular political party."

Statutes are to be applied according to their plain language; and absent clear contrary intent, words are afforded "their ordinary meaning, given the context in which they are used." Accordingly, per the terms of the Act, the activities of a tax-exempt organization are specifically exempted from the Act's independent-expenditure reporting requirements, provided that such organization neither "advocate[s]" nor "endorse[s] the election or defeat of a particular candidate . . . ." The advertisements in your scenario, by referring to two opposing candidates by name, clearly relate to particular candidates. Thus, the question is whether the organization, in disseminating the advertisements, is advocating or endorsing the election or defeat of either candidate.

To "advocate" is "to plead in favor of" or to "support or recommend publicly[,]" while "endorse" in the election context means "to express definite approval or acceptance of[.]" The advertisements you describe inform voters of a particular candidate's voting record. In doing so, however, they also note explicitly that the material provided is "in support" of the specified opposing candidate and clearly promote "saying no" to the candidate whose record is discussed. Based on these facts, I conclude that the organization, by publishing and then distributing the described advertisements, at a minimum, is advocating for the defeat of the targeted candidate.

That the advertisement does not expressly state "vote" for or against or "defeat" a candidate is not dispositive. As this Office previously opined regarding a similar, related statute, there is "no rational basis for confining [the statute] to writings that expressly use such words as 'vote for' or 'elect.' [Any such] requirement . . . invites abuse and attempts at circumvention through clever language manipulation." Regulations implementing the Act support this view. For purposes of the reporting mandate for funds spent for "the purpose of expressly advocating the election or defeat of a clearly identified candidate," the term "expressly advocating" includes not only "any communication that uses phrases such as 'vote for,' 'elect,' 'support,' 'cast your ballot for,' 'Smith for Congress,' 'vote against,' 'defeat,' 'reject,' or any variation thereof[,]" but also encompasses any communication when taken as a whole and with limited reference to external events, such as the proximity to the election, that could only be interpreted by a reasonable person as containing advocacy of the election or defeat of one or more clearly identified candidates because (i) the electoral portion of the communication is unmistakable, unambiguous, and suggestive of only one meaning and (ii) reasonable minds could not differ as to whether it encourages actions to elect or defeat one or more clearly identified candidates.

As you present it, your inquiry involves advertisements that clearly identify a candidate; enlist voters to reject, vote against, "say no to," or defeat that candidate; and identify and express support for an alternative running against the candidate. Use of such advertisements falls squarely within the definition of "expressly advocating," and absent an exemption, the Act requires "[a]ny person" to report the independent expenditures they have made in effecting the distribution of such materials.

As noted above, the exclusion applicable to tax-exempt organizations extends only to those organizations that do not engage in activity that serves to "advocate or endorse the election or defeat of a particular candidate, group of candidates, or the candidates of a particular political party." Courts are bound by the language contained in the Act. Because the sponsoring of the advertisements presented here is conduct that "advocate[s] or endorse[s] the . . . defeat of a particular candidate," a tax-exempt organization engaged in such conduct falls outside the reporting exemption afforded such organizations that do not engage in such activity. Consequently, a tax-exempt organization sponsoring the advertisements you describe is subject to the Act's reporting obligations and therefore required to file an independent expenditure report if the amount spent on such express advocacy exceeds the statutory threshold amounts.

Conclusion

Accordingly, it is my opinion that a tax-exempt organization that expressly advocates for or against the election of a clearly defined candidate must comply with the reporting requirements for independent expenditures as established by Virginia's Campaign Finance Disclosure Act of 2006, and an organization's failure to comply subjects it to the penalties set forth in the law.

With kindest regards, I am,

Very truly yours,

Jason S. Miyares
Attorney General

[Footnote: It is not clear from the facts you present whether the tax-exempt organization is a political action committee (PAC). With limited exceptions, a PAC is "any organization, person, or group of persons, established or maintained to receive and expend contributions for the primary purpose of expressly advocating the election or defeat of a clearly identified candidate." To the extent an organization constitutes a PAC, it is subject to additional filing and reporting requirements.]