Virginia Corporate Tax Exemption
STEPS TO APPLYING FOR TAX EXEMPTION IN VIRGINIA
Is my Virginia non-profit corporation eligible for any state tax exemptions?
Yes. Nonprofit corporations in Virginia are eligible for corporate income tax and sales tax exemptions if they meet the stipulations of the VA state government.
How does a VA non-profit corporation obtain corporate income tax exemption?
Virginia automatically grants corporate income and excise tax exemptions to nonprofit corporations that have been deemed federally tax exempt (501c3 status) by the IRS. No paperwork is needed to apply for the state tax exemption. It is a difficult process to receive 501c status from the IRS however.
How does a VA non-profit corporation apply for state sales tax exemption?
Virginia nonprofit corporations can apply for sales tax exemption on the Virginia Department of Taxation’s website (see link below), if the organizations is able to meet and provide the following criteria:
- Nonprofit must be deemed a 501c3 or 501c4 entity by the IRS.
- Must provide proof of compliance with Virginia’s rules concerning solicitation of contributions.
- Annual administrative costs of the organization, including salaries and fundraising, must not exceed 40 percent of its annual gross revenue.
- Must provide federal tax returns and a financial review performed by an independent certified public accountant.
Does a VA nonprofit have to renew their sales tax exemption certificate?
Yes, the Virginia Department of Taxation will notify the nonprofit corporation 120 days before the certificate of exemption expires.
Virginia Tax Exemption Info:
Virginia Department of Taxation
Nonprofit Exemption Unit
Post Office Box 27125
Richmond, Virginia 23261-7125
Phone: (804) 371-4023
Department of Taxation Website
This comprehensive guide to obtaining and maintaining 501c3 status from the IRS includes information on how to prepare your nonprofit to apply for 501c3 status, as well as information about the forms and fees required by the IRS.
This guide overviews and includes the special tax-exempt language a 501c3 nonprofit organization must include as part of its articles of incorporation.