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The following guidelines provide background information on the most common types of filings and the related exemptions in Rhode Island.
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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.
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.
Some states require organizations to appoint a “registered agent” in the state as part of the organization’s charitable registration. Rhode Island does not require this for charitable organizations having their principal place of business within the state. However, organizations with a principal place of business outside the state are required to have their director serve as registered agent for purposes of service of process, per R.I. Gen. Laws § 5-53.1-4.
Organizations subject to the state registration requirements must also include specific statements whenever the organization is requesting donations (also called “charitable solicitation”). Below is sample language to use with charitable solicitations in this state:
This request is made in support of *ORG*’s mission to *PURPOSE* and its *PROGRAMS/ACTIVITIES*. For more information about these programs, contact *EMAIL*. Contributions to *ORG* are deductible (OR are not deductible) for federal income tax purposes.
If a charitable organization solicits contributions for or makes contributions through a solicitation to an unaffiliated organization, the written solicitation must include a statement stating such and also stating that a list of organizations receiving such contributions may be obtained from the charitable organization. See R.I. Gen. Laws § 5-53.1-12.
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. (See R.I. Gen. Laws. § 7-6-70, which says that all foreign corporations are required to obtain a certificate of authority from the Sec. of state before conducting affairs in RI.) These foreign business registration requirements are separate from the charitable registration. 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.
Foreign (Out of State) Business Registration Statute: R.I. Gen. Laws § 7-6-70
In this state, organizations that 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 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. (See R.I. Gen. Laws § 44-11-11). Although the statutory section does not specifically say that unrelated business income of exempt corporations is taxable/taxed by the state, the statute defines “net income” as income that is taxable under federal law (minus certain deductions and losses). By implication then, UBI that is subject to federal income tax would also be subject to RI state income tax.
It is also important to consider whether applying for sales and use tax and property tax exemption would be appropriate for your organization. More information on state tax exemptions is available at this link. An accountant or attorney can provide specific information about your organization’s eligibility for exemption.
This state does not have a corporate franchise tax.
RI Department of Business Regulation Charitable Organizations webpage: https://dbr.ri.gov/divisions/charitable/
Certificate of Authority for Foreign (out of state) corporation: https://www.sos.ri.gov/doc_lib/search
Online Registration: https://elicensing.ri.gov/
Information on State Tax Exemption: https://www.sos.ri.gov/divisions/business-services/nonprofit/business-basics/tax-exempt-status
Rebecca R. Dye
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.
