Jackson Ross PLLC

Non-Profits and State and Local Tax Exemption

My non-profit organization was just approved for federal tax exemption. Are we also exempt from state and local taxes?

Federal tax exemption status does not automatically grant your organization an exemption from state and local taxes. Whether your organization will have to submit a separate application will depend on where the organization is based. In New York, to apply for exemption from state and local sales and use taxes your organization must submit a Form ST-119.2. To apply for exemption from franchise tax use either Form CT-247 or CT-13, depending upon whether your organization has to pay federal tax on unrelated business income. In the District of Columbia, use Form FR-164 to apply for exemption from income and franchise tax and sales and use tax. In Georgia, no form is necessary to apply for income tax exemption: you just need to attach a copy of the IRS determination letter and your organization’s formation documents to the initial exempt organization tax return filed with Georgia. Note that, unfortunately, in Georgia, organizations exempt from federal income tax under IRC §501(c)(3) are generally still subject to state sales taxes, although Georgia law does specifically exempt certain groups such as religious institutions and health centers.

For assistance in applying for both federal and state tax exemption, please contact us at your earliest convenience.