The following guidelines provide background information on the most common types of filings and the related exemptions in Tennessee.
This state has a narrow religious exemption for churches or established physical places for worship within Tennessee, at which nonprofit religious services and activities are regularly conducted and carried on, as well as groups without a physical presence in Tennessee which are exempt from filing the IRS Form 990, such as churches. For these groups, the exemption is automatic. Depending on their activities in this state, other religious organizations, not exempt from the IRS Form 990 requirement, may need to complete a charitable registration, despite their religious identity.
This state defines solicitation very broadly, but the state does have an exemption for organizations that intend to solicit less than $50,000 annually.
A non-exempt entity that is not domiciled within Tennessee must register in accordance with the laws of Tennessee if: (a) its non-Internet activities alone would be sufficient to require registration; (b) the entity solicits contributions through an interactive website; and either the entity: (c) (i) specifically targets persons physically located in Tennessee for solicitation, or (ii) receives contributions from Tennessee on a repeated and ongoing basis or a substantial basis through its website; or (d) the entity solicits contributions through a site that is not interactive, but either specifically invites further offline activity to complete a contribution, or establishes other contacts with Tennessee state, such as sending e-mail messages or other communications that promote the website.
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. Tennessee has an online filing system, and it may be more efficient to use that system, rather than complete and mail the URS manually. Additionally, information from the online initial registration can be used 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. This state does not currently have this requirement--the Tennessee Secretary of State is automatically appointed as the agent for accepting service of process for out-of-state organizations.
This state does not require organizations to post specific language when conducting charitable solicitations.
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. 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 should apply by sending a request to the department of revenue, along with a copy of their determination letter. Note that, although an organization may be exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI will be subject to Tennessee’s income tax. [Tenn. Code Ann. § 67-4-2007(a).]
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 about state sales tax exemption is available at this link and information about state property tax exemption is available through the Tennessee Comptroller of the Currency’s Property Tax Exemption Manual. An accountant or attorney can provide answers to specific questions regarding your organization’s eligibility for exemption.
County and Municipal Registration Requirements
Tennessee’s Charitable Solicitation Act does not prevent counties or municipalities from creating more stringent registration requirements for charitable organizations. Therefore, it is important to contact an attorney and/or local governing bodies to determine if there are any applicable local ordinances that impact your organization.
If you have questions about this state profile or are seeking an attorney in Tennessee, please contact Jonah Samples at email@example.com.
Foreign Business Registration: https://sos.tn.gov/business-services/non-profit-corporations
Information about State Tax Exemption: https://www.tn.gov/content/dam/tn/revenue/documents/notices/sales/sa les15-16.pdf
a Pro-Bono Attorney at Nelson Mullins Riley & Scarborough LLP
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