State Matrix

UPDATES

WHAT YOU'LL LEARN

The following guidelines provide background information on the most common types of filings and the related exemptions in Illinois. Please note that this profile includes the highlights of the relevant statutes and regulations but is not an exhaustive outline of the rights and duties those statutes and regulations establish.

Fundraising in this State

how to know (and what to do) if you're fundraising in this state

In this state, organizations are generally required to register prior to soliciting for donations and submit annual reports thereafter. However, religious organizations can apply for exemption from the annual reporting requirement when they submit their initial registration.

if you're Fundraising in Multiple states, make sure you Understand the URS.

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. See pg. 5 of the introduction for more information on the Unified Registration Statement.

evaluate whether you'll need a Registered agent

Note that this jurisdiction’s charitable registration process requires organizations incorporated in other states to appoint an in-state registered agent. This can be done through a commercial service or by appointing a person or entity who is a supporter of your organization’s mission.

follow the rules about communicating with the public

This state does not require organizations to post specific language when conducting charitable solicitations unless the organization is working with a professional fundraiser.

Charitable REgistration statute

Charitable registration exemption statute

After you've registered–the Annual report requirement

Conducting Activities or Programs in this State

UNDERSTAND THE Business Registration REQUIREMENTS

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. A completed foreign business registration, called a “certificate of authority” in Illinois, is a key requirement for foreign corporations seeking to register for charitable solicitation in Illinois. See 805 ILCS § 105/113/05. 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 which might trigger this requirement include having employees physically located in the state, conducting programs in the state, and having an office in the state.

Business registration statute

State Taxes and Exemptions

State and local taxes

In this state, organizations which have received recognition of federal income tax exemption under IRC Sec. 501(c)(3)  are automatically exempt from state income tax. Some organizations may choose to send a copy of their IRS determination letter to the state department of revenue to indicate the organization’s position that it qualifies for the exemption. Note, however, 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.

It is also important to consider whether applying for sales and use tax and property tax exemptions would be appropriate for your organization. An accountant or attorney can provide answers to specific questions regarding your organization’s eligibility for exemption.

Corporate Income Tax Statute

CORPORATE FRANCHISE TAX STATUTE

BEFORE YOU GO: OTHER SPECIAL REQUIREMENTS

A FINAL NOTE: OTHER HELPFUL INFORMATION

useful links

Application for Foreign Nonprofit to Conduct Business in Illinois: https://www.cyberdriveillinois.com/publications/pdf_publications/nfp1131 5.pdf

Information Regarding Sales Tax Exemptions for Nonprofits:

https://www2.illinois.gov/rev/businesses/nonprofits/Pages/default.aspx

Information Regarding Property Tax Exemptions for Nonprofits:

https://www2.illinois.gov/rev/research/publications/Pages/pio-37.aspx

Reviewed by

Sorin Leahu

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 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.