Tax-exempt organizations are not exempt from paying employee taxes, real estate taxes, or sales taxes. The organization may have to pay taxes on money you receive from an unrelated business activity.
Filing Articles of Incorporation
Articles of Incorporation is a document that lists the following:
- The organization’s purposes;
- The number of directors on the board of directors;
- The names of the directors; and
- The name and address of the registered agent.
If the organization seeks tax-exempt status, the Articles of Incorporation must state that
- The organization will use the money that it makes to serve its charitable purpose;
- The organization will not get involved in substantial lobbying activities or any political activity;
- Individuals will not personally benefit from involvement with the organization; and
- If the organization dissolves, any assets it has after paying creditors will be distributed to similar tax exempt organizations.
Applying for tax-exempt status
Tax-exempt organizations do not pay federal or state tax on income related to the organization's exempt purpose. If your organization is a 501(c)(3) exempt organization, then any donations made to the organization may also be a tax deduction for the donor.