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 North Carolina.

Fundraising in this State

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

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. Although the statute does not specify that an organization file for this exemption, the NC Secretary  of  State  does  have  exemption  request  forms for other types of exemptions located at this link.

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. Using the URS, rather than a state-specific registration form, has pros and cons. The URS typically must be submitted by mail. This state has an online filing system and using that system may be more efficient than completing and mailing the URS manually. Additionally, information from the state- specific initial online registration can be used to auto-populate annual reports, which will save the organization time in the future.

evaluate whether you'll need a 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.

follow the rules about communicating with the public

This state requires organizations to include specific statements whenever the organizations are requesting donations (also called “charitable solicitation”). Religious organizations generally are not required to include this statement, but such organizations may choose to post the below or similar language as a best practice to build trust with donors and state regulators. Below is sample language to use with charitable solicitations in this  state (see N.C.G.S. 131F-9(b)):  

This solicitation is made on behalf of *ORG*, a *STATE* *ENTITY TYPE*, in support of its *PURPOSE* and *PROGRAMS*. Please contact *EMAIL* if you wish to request a statement regarding the amount of your contribution which is deductible or a written  financial statement.

Charitable REgistration statute

Charitable registration exemption statute

After you've registered–the Annual report requirement

N.C. Gen. Stat. § 131F-5(c) [Note, while charitable organizations have to get their licenses renewed under this statute, under N.C.G.S. 131F-3(1) religious organizations are not subject to this 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.

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.

Business registration statute

State Taxes and Exemptions

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 complete a North Carolina Department of Revenue questionnaire which will result in the determination of the organization’s tax status. 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. [N.C.G.S. § 105-130.11.] Additionally, you may wish to consult with an accountant or attorney to confirm whether applying for sales and use tax and property tax exemption would be appropriate for  your organization. For more information regarding these taxes, please see the North Carolina Department of Revenue website.

Corporate Income Tax Statute

CORPORATE FRANCHISE TAX STATUTE

BEFORE YOU GO: OTHER SPECIAL REQUIREMENTS

A FINAL NOTE: OTHER HELPFUL INFORMATION

useful links

Foreign Business Registration (called an application for “Certificate of Authority”): https://www.sosnc.gov/Guides/register_a_foreign_business/requirements

Online Registration: https://www.sosnc.gov/divisions/charities

North Carolina Department of Revenue Guidance on State Tax Exemptions: https://www.ncdor.gov/taxes-forms/sales-and-use-tax/sale- and-purchase-exemptions

North Carolina Department of Revenue Publication on Nonprofits and State Tax Exemption: https://files.nc.gov/ncdor/documents/files/State- Taxation-and-Nonprofit-Publication.pdf

Reviewed by

a Volunteer Attorney in North Carolina

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.