We help your 501(c)(3) nonprofit achieve tax exemption in any state.
In many states, nonprofit organizations must apply with the state tax authority in order to become exempt from corporate income and franchise taxes. Receiving an IRS determination letter does not mean nonprofits are automatically exempt from state taxes. Instead, nonprofits must apply for state tax exemption separately from applying for a 501(c) tax exemption with the IRS.
The landscape of state tax exemption is complicated, as each state has different taxes and exemption requirements. Whether your nonprofit operates in one or multiple states, obtaining exemptions from income, franchise, sales, and use taxes can consume a great deal of a nonprofit’s staff time and financial resources.
Harbor Compliance can help your nonprofit become tax exempt in Massachusetts and other states as needed. A nonprofit specialist will work with you throughout the entire process and prepare your applications. Let us simplify your state filings so you can remain focused on your mission.
To file to obtain exemption from state income tax:
|Agency:||Massachusetts Department of Revenue|
Submit: Registration (if not already registered), a copy of the IRS Determination Letter of Exemption granting the corporation Section 501 (c) status, a copy of the Articles of Organization filed with the Secretary of State's Office, and a copy of the IRS documentation of Employer Federal Identification Number if it is not stated on the IRS Section 501 (c) Determination Letter.
You should budget approximately three months for your tax exemption application to be processed. Any missing information will result in a delay or outright rejection. Our specialists will prepare your tax exemption application to the state’s exacting standards, allowing your application to be approved quickly.
In theory, nonprofits raise money that is used exclusively to further their charitable purpose, as stated in purpose statement. In practice, organizations sometimes receive unrelated business income (UBI) as part of their daily operations. In many states, your organization may be liable for taxes on this UBI (or the entire amount of your income), and submit related filings. If you have accounting questions, about UBI or otherwise, contact your accounting professional for assistance.
Contact us today and let us know in which states your organization is looking to ensure tax exemption. We will prepare and file all your state applications so that you can focus on other activities central to your nonprofit's mission.
Contact us to discuss your tax exemption needs. We prepare and file your applications for you!