Tax Matrix

New York

UPDATES

These updates reflect recent legislation.

New York Expanded Charitable Regulations & Donor Disclosure Requirements. Nonprofits that fundraise in New York (and are not eligible for a charitable registration exemptions) must now complete additional reporting requirements. The charitable organization annual financial report must now be filed with both the New York Charities Bureau and the New York Department of State. Additionally, under Exec. Law § 172-e(4), certain 501(c)(3) organizations must submit donor information to the Department of State. According to agency guidance, some of the reports may be made public, at the discretion of the Department. The regulations will particularly impact faith-based nonprofits that have 501(c)(4) sister organizations. For example, Focus on the Family, a 501(c)(3) has a 501(c)(4) sister organization, CitizenLink. Readers interested in learning more should review this summary from law firm Caplin & Drysdale and this article from Venable LLP. The full text of the laws are available here and here.

Charitable registration statute

charitable registration exemption statute

business REgistration statute

Corporate income tax statute

Corporate franchise tax statute

In New York, the corporate franchise tax is synonymous with corporate income tax.

Annual report requirement

About this REsource

The following guidelines provide background information on the most common types of filings and the related exemptions in New York.

State Charitable funding registration

In this state, religious organizations are automatically exempt from charitable registration requirements. The religious exemption is not limited to IRS Form 990 Non-Filers, such as churches.

Unified Registration statement

In this state, organizations that are required to register have the option of registering through the Unified Registration Statement, which is a standardized charitable registration accepted in many states. As described in the introduction, using the URS, rather than a state-specific registration form, has pros and cons.

New York has an online filing system, so using that system may be more efficient than completing and mailing the URS manually. New York also allows charitable organizations to submit annual reports online, so using the New York online initial registration may also streamline the process for preparing future online annual reports.

In-state registered agent

Some states require organizations to appoint a “registered agent” in the state as part of the organization’s charitable registration. This state does not currently have this requirement.

disclosure requirements and sample language

This state requires organizations to include specific statements whenever the organization is requesting donations (also called “charitable solicitation”).

Below is sample language to use with charitable solicitations in this state:

This solicitation is made by *ORG*, doing business as *DBA*, in support of its *PURPOSE* and *PROGRAMS*. For more information about *ORG* and other charitable organizations, visit the New York Attorney General’s website at https://www.charitiesnys.com/ or call (212) 416-8401.

Religious organizations generally are not required to include this statement, but posting some language regarding the organization’s legal name and contact information is often a best practice to build trust with donors and state regulators.

State specific special requirements

See below.

Business registration

Depending on the type and volume of activities an organization has in this state, the organization may also need to register as an out-of-state business (sometimes called a “foreign business”) with the secretary of state or another state agency.

These foreign business registration requirements are separate from the charitable registration. Not every out-of-state organization needs to register. An attorney can assist the organization in determining whether its connections with this state are significant enough to trigger the foreign business registration requirement.

Examples of activities that might trigger this requirement include having employees physically located in the state, conducting programs in the state, and having an office in the state.

State and local taxes

In this state, organizations that have received recognition of federal income tax exemption are also exempt from the state income tax. However, to receive this exemption, organizations must apply. The exemption is not automatic. A link to the state  corporate  franchise  tax  exemption  application form is available here. Note that, although an organization may be exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI also may be subject to state income tax. [New York Tax Law Article 13.] Consult with an accountant or attorney to confirm.

It is also important to consider whether applying for sales and use tax and property tax exemption would be appropriate for your organization. More information about state tax exemption is available on the New York Department of Taxation and Finance sales and use tax webpage and its property tax exemption webpage. An accountant or attorney can provide answers to specific questions regarding your organization’s eligibility for exemption.

Miscellaneous

Helpful links

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Legal disclaimer

This resource contains general educational information related to legal concepts, but this information does not constitute legal advice. Anyone seeking legal advice is strongly encouraged to consult with a licensed attorney regarding any of the matters discussed herein. Although licensed attorneys work with Napa Legal, Napa Legal is not a law firm and does not undertake legal representation on behalf of any clients. Further, no licensed attorney working with or on behalf of Napa Legal agrees to undertake legal representation on behalf of any client unless the terms of such representation are set forth in a separate, written representation agreement.