The following guidelines provide background information on the most common types of filings and the related exemptions in Wisconsin.
Under Wis. Stat. § 202.11(1), any organization that has received recognition of exemption from taxation under Internal Revenue Code (“IRC”) § 501(c)(3) qualifies as a charitable organization. Any other entity that is or purports to be established for a charitable purpose is also a charitable organization for registration purposes.
Under Wis. Stat. § 202.12, a charitable organization needs to be registered if it solicits in Wisconsin or has contributions solicited in Wisconsin on its behalf.
What is a Charitable Purpose?
Under Wis. Stat. § 202.11(2), a “charitable purpose” is either a purpose described in IRC § 501(c)(3), or a benevolent, educational, philanthropic, humane, scientific, patriotic, social welfare, advocacy, public health, environmental conservation, civic, or other eleemosynary objective.
What is a Contribution?
In the context of charitable fundraising in Wisconsin, a contribution is generally a grant or pledge of money or other thing of value given to a charitable organization, but the law has some exemptions to this definition. See Wis. Stat. § 202.11(5).
Notably, contribution under Wisconsin law does not include food, used clothing, and used household goods.
Additionally, the definition of contribution excludes income from bingo or raffles, a government grant, or a bona fide membership fee (except that if membership is conferred solely in exchange for a grant or pledge of money to the charitable organization in response to a solicitation).
What is a Solicitation?
In this context, “to solicit” means to ask for a donation for charitable purposes, under Wis. Stat. § 202.11(8).
Similarly, a “solicitation” is almost any form of asking for donations for charitable purposes, including verbal requests, advertisements, and printed material. For a full list, see Wis. Stat. § 202.11(9).
Are any fundraising practices off-limits in Wisconsin?
Under Wis. Stat. § 202.16(1), charities and anyone who helps charities fundraise must avoid certain practices that harm or mislead consumers.
Below are some examples of the types of conduct that are prohibited:
Does Wisconsin exempt any organizations from registration requirements?
There are twelve reasons a charitable organization may be exempt from registration. Some of the most common are listed below:
In Wisconsin, charities can register through the Unified Registration Statement, which is a standardized charitable registration accepted in many states.
Some states require organizations to appoint a “registered agent” in the state as part of the organization’s charitable registration. Wisconsin does not currently have this requirement.
Wisconsin requires organizations to include specific statements whenever the organizations are soliciting contributions.
Religious organizations that fall into the state’s narrow registration exemption are generally are not required to include these statements. However, posting the language is often a best practice to build trust with donors and state regulators. 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&.
In addition to registering to solicit contributions, 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. 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 which received recognition of federal income tax exemption are automatically exempt from the state corporate income tax. Some organizations, for example organizations with employees in Wisconsin, may need to complete an application for business tax registration. Tax-exempt status will be indicated on the application.
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 Wisconsin’s income tax (see: Wis. Stat. § 71.26(1)(a)).
It is also important to consider whether applying for sales and use tax and property tax exemption would be appropriate for your organization. The Wisconsin Department of Revenue has information about property tax exemption and sales and use tax exemptions on its website. An accountant or attorney can provide specific answers to these questions.
This state does not have a corporate franchise tax.
Other Agencies of Note:
While not a complete list, other agencies you may want to contact include:
*The information above is not guaranteed to be accurate and is for informational purposes only and should not be construed as either legal or tax advice. Consult with your attorney or state regulators for up-to-date information.
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 NLI, NLI 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 NLI 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.