Texas Tax Exemption
We help your 501(c)(3) nonprofit achieve tax exemption in any state.
- Become exempt from corporate and franchise tax.
Use the money you save on taxes to further your mission.
- Turnkey application preparation.
We prepare and submit your complete exemption application.
- Guaranteed approval.
Get expert assistance with your tax exemption applications from an experienced specialist.
Texas Nonprofit Tax Exemption
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 Texas 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.
How does a nonprofit apply for tax exemptions in Texas?
To file to obtain exemption from state income tax:
|Agency:||Texas Comptroller |
AP-204, AP-205, AP-206, AP-207, or AP-209
Texas state law permits 501(c)(3) exempt and various other types of organizations to be exempt from paying sales tax, hotel occupancy tax, and franchise tax.
How long does it take to become tax exempt?
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.
Unrelated Business Income (UBI)
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.
How we help
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.