The following guidelines provide background information on the most common types of filings and the related exemptions in Connecticut.
In Connecticut, organizations are generally required to register prior to soliciting for donations. Connecticut has a broad definition of solicitation and does not specify a threshold which triggers registration. However, the requirement has several exemptions, including a religious exemption. Religious organizations must apply for this exemption; the religious organization exemption is not automatic.
In addition to the religious exemption, there is also an exemption for organizations which (1) receive less than $50,000 in contributions annually and do not compensate a fundraiser. The statute does not specify whether the $50,000 in contributions is gross or is from Connecticut sources only.
There are several other allowable exemptions, and information on each may be found online at the Connecticut Department of Consumer Protection, under the Charitable Solicitation Registration section.
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. Using the URS, rather than a state-specific registration form, has pros and cons. The URS typically must be submitted by mail. If the state has an online filing system, it may be more efficient to use that system, rather than complete and mail the URS manually. Additionally, states that require charitable organizations to submit annual reports often use information from the state-specific initial registration to auto-populate annual reports, saving an organization time in the future.
In Connecticut, a state-specific application for exemption on religious or other grounds may be obtained online (Form CPC-54) and then mailed, or submitted online through the Connecticut Department of Consumer Protection, under the Charitable Solicitation Registration section. This section also provides a link to a guide for those planning to start a charitable organization within the state.
Some states require organizations to appoint a “registered agent” in the state as part of the organization’s charitable registration. Connecticut does not currently have this requirement.
Connecticut does not require organizations to post specific language when conducting charitable solicitations.
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.
In Connecticut, 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 by providing the Department of Revenue Service with a copy of the organization’s determination letter. The exemption is not automatic. 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. (Conn. Gen. Stat. § 12-242bb.) 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. Additional information is available at the Connecticut Department of Revenue Services website and through the Connecticut Office of Legislative Research. Be sure to look for the most up-to-date guidance on these websites. An accountant or attorney can provide specific answers to questions related to your organization’s eligibility for exemptions.
Application for Certificate of Authority: https://portal.ct.gov/-/media/SOTS/Business-Services/BSD-Forms/Corporations/Stock-Corporations/Foreign/App-for-Cert-of-Authority-2020.pdf
Online Registration: https://portal.ct.gov/DCP/Charities/Charitable-Solicitation-Registration-Information
Information Regarding State Income Tax and Application for Tax Exemption:
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.