West Virginia

Multi-State Compliance Matrix

Updates

What You’ll Learn

If you’re a nonprofit in West Virginia, or you’re a nonprofit considering fundraising or other activities in West Virginia, you must understand the requirements that West Virginia has established for nonprofits operating in the state.  

How can you become familiar with these laws? Where should you start?  

Start here. This state profile includes the basic requirements nonprofits must consider. Reading the profile and implementing appropriate compliance measures will help you prepare your organization for success in West Virginia.

Getting to Know the State Nonprofit Corporation Law

Background

*Important primarily for nonprofits incorporated in West Virginia

Emma Woodhouse, handsome, clever, and rich, with a comfortable home and happy disposition, seemed to unite some of the best blessings of existence; and had lived nearly twenty-one years in the world with very little to distress or vex her. She was the youngest of the two daughters of a most affectionate, indulgent father; and had, in consequence of her sister’s marriage, been mistress of his house from a very early period. Her mother had died too long ago for her to have more than an indistinct remembrance of her caresses; and her place had been supplied by an excellent woman as governess, who had fallen little short of a mother in affection.

- Emma, Jane Austen

When reading a novel, we get to know a fictional character by the author’s description. The author tells us about the character’s appearance, purpose, actions, mannerisms, and values.  

Nonprofit corporations are something like fictional characters.  

We learn how a nonprofit will look and act and make decisions not by reading a novel, but by reading the state law (called the nonprofit corporation act) and the rules the nonprofit makes for itself (called the bylaws and articles of incorporation). The law and the organization’s own rules tell us the organization’s name, purpose, way of acting, and method of making decisions.  

To get to know your own nonprofit, be sure to review the sections below.  

State Nonprofit Corporation Law

Corporate Governance

Directors’ Conflicting Interest Transactions: W. Va. Code § 31E-8-860 Need to review the basic best practices for conflicted transactions? See Bylaws Module 14: Conflicts of Interest.

Director Standards of Conduct: W. Va. Code § 31E-8-830; Need a refresher on the role of directors? See Bylaws Module 6: Directors.

Standards of Liability for Directors: W. Va .Code § 31E-8-831

Membership Rights and Liabilities: W. Va. Code § 31E-6-601; Not sure what a “member” is? Need to review the basics? See Bylaws Module 5: Members.

Indemnification of Directors: W. Va. Code § 31E-8-851; W. Va. Code § 31E-8-852; Not sure what “indemnification” is? Need to review the basics? See Bylaws Module 8: Indemnification.

For Religious Nonprofits

Nonprofit Religious Corporation Act: West Virginia’s nonprofit corporation law mentions the option for nonprofit corporations to incorporate for religious purposes. However, the law lacks both: (a) specific provisions to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs and (b) an option to incorporate expressly as a nonprofit religious corporation. W. Va. Code § 31E-1-101. Confused about what it means to be a religious nonprofit corporation? See our whitepaper “Why a Religious Corporation?

Reliance on Religious Guidance in Governance: West Virginia law permits a director, in the fulfillment of the director’s fiduciary duties, to rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter, but does not expressly allow a director to rely on guidance from religious figures within his or her faith tradition. W. Va. Code § 31E-8-830

Understanding Religious Liberty in this State

Case Study

*Important for all nonprofits doing business in West Virginia, whether incorporated in West Virginia or elsewhere

The religious education and formation of students is the very reason for the existence of most private religious schools, and therefore the selection and supervision of the teachers upon whom the schools rely to do this work lie at the core of their mission. Judicial review of the way in which religious schools discharge those responsibilities would undermine the independence of religious institutions in a way that the First Amendment does not tolerate.

- Our Lady of Guadalupe School v. Morrisey-Berru, 140 S. Ct. 2049 (2020).  

Sometimes, the state or local government (like the city or county) makes laws that could conflict with your organization’s free exercise of religion or its sincerely-held religious beliefs.  

For example, a law might require employers not to make faith-based distinctions between job candidates. If your organization’s mission is to pass on the teachings of your faith, you will need to make faith-based distinctions in evaluating candidates because their faith commitments will affect their abilities to partner in your mission and witness the faith to your program participants.

So what do you need to do? Be aware of the laws listed below. If any of the laws impact your organization—for example, if you are an employer or a facility open to the public—learn more about how you can protect yourself by reviewing Napa Legal’s religious liberty resources. Talk to an attorney if you have specific concerns.

Religious Liberty Protections

State Religious Freedom Restoration Act: West Virginia has enacted a RFRA that protects the religious free exercise of all individuals and entities by requiring government burdens on religious exercise to satisfy strict scrutiny. These protections originate in a statute rather than the state constitution. Not sure what a “religious freedom restoration act” is? Click here to learn the fundamentals.

State Constitutional Protection of Free Exercise: The West Virginia Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment. W. Va. State Const. art III, § 10; art. III, § 15

Blaine Amendment: The West Virginia Constitution does not contain a Blaine Amendment but also does not expressly protect faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Not sure what a Blaine Amendment is? Review the basics here.

Other Relevant State Laws and Regulations

West Virginia currently has a statewide public accommodation law. Be sure you understand this and any similar local regulations that apply to your organization.  

Religious Freedom and Public Accommodation Laws: West Virginia’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions. W. Va. Code § 5-11-2. Not sure what a public accommodation law is or what it means for your organization’s religious liberty? Learn the basics in this article which discusses the issue in the context of the case Fulton v. City of Philadelphia.

Protections for Religious Exercise in State of Emergency: West Virginia law has no explicit constitutional or statutory protections for religious exercise during a time of emergency, but see W. Va. Code § 61-6-13  

Key Employment Laws and Regulations

In addition to tracking with the protected classes in the federal anti-discrimination employment law (race, color, religion, sex, and national origin), Title VII of the Civil Rights Act of 1964, West Virginia prohibits employers from discriminating on the basis of age, ancestry, blindness, or disability. An employer is any person who has more than twenty employees for twenty or more weeks each year. No religious exemptions apply to this requirement. Local governments may also have employment-related regulations. An attorney can help you understand what requirements apply to your organization.

Religious Freedom for Faith-Based: Employers: West Virginia’s nondiscrimination laws related to employment include no meaningful accommodations or exemptions to protect the autonomy of religious employers. W. Va. Code § 5-11-3. Need to review the basics on religious freedom and employment matters? Walk through a self-audit of best practices here.

Religious Liberty for Employees:  Not Present

Conducting Activities or Programs in this State

Understanding the Business Registration Requirement

*Important primarily for nonprofits doing business in West Virginia but incorporated elsewhere

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 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.  

Business Registration Statute

Fundraising and Charitable Registration in This State

How to Know (And What to D0) If You're Fundraising In This State

*Important for both West Virginia and Foreign Nonprofits

Not sure what “charitable registration” is? Need to review the basics? Read this article for a refresher.

This state has a narrow religious exemption for groups that 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 that are not exempt from the IRS Form 990 requirement may need to complete a charitable registration, despite their religious identity.

This state defines solicitation broadly, but has a registration exemption for organizations that: (1) do not use a professional solicitor, and (2) do not intend to raise more than $50,000 in donations from the public annually. The statute does not specify whether the $50,000 maximum is for all donations or for West Virginia donations only. Please note that the $50,000 maximum is effective on June 5, 2020 and is an increase from the previous maximum of $25,000.

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.  As described in the introduction, using the URS, rather than a state-specific registration form, has pros and cons. West Virginia does not have an online charitable registration option at this time, so the application must be submitted by mail regardless of whether you choose to file the URS or the state specific registration.

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 organization is requesting donations (also called "charitable solicitation"). Below is sample language to use with charitable solicitations in this state:

This request is on behalf of *ORG* in support of its mission to *PURPOSE*. This contribution is (OR IS NOT, as applicable) deductible for federal income tax purposes. A financial statement of the charitable organization disclosing assets, liabilities, fund balances, revenue, and expenses for the preceding fiscal year will be provided to any person upon request. Requests may be sent to *EMAIL*.

Charitable Registration Statute

Charitable Registration Exemption Statute

Annual Report Requirement

W. Va. Code § 29-19-6

Audit Requirements: As a condition of maintaining authorization to fundraise in the state, West Virginia requires the submission of reviewed or audited financials even for organizations with annual contributions of $500,000 or less. W. Va. Code § 29-19-5

Get Acquainted with State and Local Taxes and Exemptions

State and Local Taxes

*Important for all nonprofits doing business in West Virginia, whether incorporated in West Virginia or elsewhere

In this state, 501(c)(3) organizations that receive federal income tax exemption are automatically exempt from the state corporate income tax. Organizations that are submitting a business registration will indicate their exempt status on the business registration form. Note that, although an organization may be exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI may be subject to state income tax. [See W. Va. Code § 11-24-5(a).] Consult with an accountant or attorney to confirm.

Also consider whether your organization might be eligible for sales and use tax or property tax exemption. In this state, federal § 501(c)(3) status does not automatically provide an exemption from sales, use, and property taxes. More information about the sales and use tax exemptions and applications is available on the West Virginia Department of Revenue website and in the West Virginia administrative rules. An accountant or attorney can provide answers to specific questions regarding your organization’s eligibility for exemption.

Corporate Income Tax Statute

West Virginia imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status. W. Va. Code § 11-24-5

Corporate Franchise Tax Statute

Not Present

What You Need to Know About Sales Tax

Sales and Use Tax: West Virginia imposes a sales and use tax on religious organizations’ sales and provides no meaningful exemption. West Virginia imposes a sales and use tax on religious organizations’ purchases but generally provides a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ purchases upon application. W. Va. Code § 11-15-9

State Tax Treatment of Unrelated Business Income: W. Va. Code § 11-24-5(a)

Property Tax: West Virginia imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes. W. Va. Code § 11-3-9

State-Specific Special Requirements

Miscellaneous

Reviewed by

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.

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**Please note that the following state profiles are forthcoming and will be published soon:Hawaii and Washington