The following guidelines provide background information on the most common types of filings and the related exemptions in North Carolina.
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.
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.
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.
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.
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.]
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 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.
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
a Volunteer Attorney in North Carolina
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