This state does not have a corporate franchise tax.
The following guidelines provide background information on the most common types of filings and the related exemptions in District of Columbia.
In the District of Columbia, organizations are generally required to register prior to soliciting for donations. However, the registration requirement has a religious exemption. Religious organizations must apply for this exemption; the religious organization exemption is not automatic. More information about registration and exemption is available at the Department of Consumer and Regulatory Affairs website.
The District of Columbia has a very broad definition of solicit, which encompases a “request directly or indirectly for any contribution on the plea or representation that such contribution will or may be used for any charitable purpose . . . .” [See D.C. Code § 44–1701(3)(A).]. Organizations that receive less than $25,000 annually do not need to register. [See D.C. Mun. Regs. tit. 16, § 1301.1.] The statute does not specify whether the $25,000 maximum applies to contributions from DC-sources or for total contributions regardless of source. [See D.C. Mun. Regs. tit. 16, § 1301.1.]
In the District of Columbia, 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. DC has an online filing system, and using that system may be more efficient than completing and mailing the URS manually. Additionally, creating the initial organization profile may allow the organization to auto-populate annual charitable organization reports, which could save the organization time in the future.
The District of Columbia requires organizations incorporated in other states to appoint an in-state registered agent. [See D.C. Code § 44–104.02.] This can be done through a commercial service or by appointing a person or entity who supports the organization and resides in the District.
The District of Columbia does not require organizations to post specific language when conducting charitable solicitations. However, the District of Columbia prohibits compensation or consideration for charitable solicitations made over the telephone if an exemption does not apply. [See D.C. Code § 44–1708.]
Although the District of Columbia does not require specific language for charitable solicitations, a charitable solicitor is always required to disclose, display, produce and possess a solicitor information card when conducting charitable solicitations. [See D.C. Code § 44–1705(a). See also D.C. Mun. Regs. tit. 16, § 1307.1.] The individual holding the solicitor information card may permit others to use his or her card by providing written consent. [See D.C. Code § 44–1711(a).] Lastly, there are also certain exemptions from the requirement to use a solictor information card. [See D.C. Code § 44–1703(b)-(c). See also D.C. Mun. Regs. tit. 16, §§ 1301-03.]
The District of Columbia requires foreign nonprofit organizations not eligible for the exemption to register as a business with the D.C. Department of Consumer and Regulatory Affairs (“DCRA”) before the organizations can complete their charitable solicitation registration.
In the District of Columbia, organizations that have received a 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. Although an organization may be exempt, if it has unrelated business taxable income (“UBTI”) that is subject to federal taxation, that UBTI also will be subject to the District of Columbia’s income tax. [See D.C. Code § 47-1802.01.]
It is also important to consider whether applying for sales and use tax and property tax exemptions would be appropriate for your organization. More information about tax exemption in the District of Columbia and a copy of the exemption application is available at the Office of Tax and Revenue website. An accountant or attorney can provide answers to specific questions regarding your organization’s eligibility for exemption.
Foreign Business Registration: https://eservices.dcra.dc.gov/DocumentManagementSystem/Home/retriev e?id=Foreign%20Registration%20Statement%20FN-1.pdf
Online Charitable Solicitation Registration: https://dcra.dc.gov/page/charitable-services-business
District of Columbia Tax Exemption Information: https://otr.cfo.dc.gov/page/exempt-organizations
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 NLI, NLI 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 NLI 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.