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The following guidelines provide background information on the most common types of filings and the related exemptions in Vermont.
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In this state, charitable solicitation registration is no longer required as of October 16, 2019. Be sure to review other state registration and tax requirements, and stay apprised of updates by visiting the applicable state agency’s website. Paid fundraisers must file a notice of solicitation, which includes, among other things, a copy of the contract between the paid fundraiser and the charitable organization. The notice of solicitation must be accompanied by a bond in the amount of $20,000. 9 Vt .Stat. Ann. § 2473
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 does not require organizations to post specific language when conducting charitable solicitations.
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Depending on the type and volume of activities an organization has in this state, the organization may need to register as an out-of-state business (sometimes called a “foreign business”) with the secretary of state or another state agency. 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.
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. Although an organization may be exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI also will be subject to Vermont’s income tax. [See Vt. Stat. Ann. tit. 32 § 5811(18)(D).]
It is also important to consider whether applying for sales and use tax and property tax exemptions would be appropriate for your organization. Information about state property tax exemption and sales and use tax exemptions is available from the Vermont Department of Taxes. An accountant or attorney can provide specific answers to questions about your organization’s eligibility for exemptions.
This state does not have a corporate franchise tax.
If you have questions about this state profile or are seeking an attorney in Vermont, please contact Jonah Samples at jonah.samples@nelsonmullins.com. Nelson Mullins is a diversified law firm of more than 800 attorneys, policy advisors, and professionals across 25 offices serving clients in more than 100 practice areas.
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.
