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Tax-Exemption For North Carolina Non-Profit Organizations

 

INFORMATION FOR NC NON-PROFITS ABOUT CERTAIN STATE AND FEDERAL TAX EXEMPTIONS

Am I able to obtain federal tax-exemption for my NC non-profit?

Yes. File Form 1023 Application for Recognition of Exemption with the IRS in order to obtain 501c3 status federally. This process can take up to nine months or longer. After you are considered federally tax-exempt by the IRS they will send you a Letter of Determination.

Are there any state tax-exemptions I can apply for?

You will receive a questionnaire form the North Carolina Department of Revenue after you have filed your Articles of Incorporation for income tax exemption. The Secretary of State notifies the Department of Revenue after your Articles are filed, and they then send you the questionnaire (known as Form CD-345). Fill out the questionnaire and return it to the Department of Revenue. Include copies of your non-profit’s bylaws as well as Articles of Incorporation.

For more information, see our North Carolina Taxes page.

So I will not need to register my NC non-profit with the Department of Revenue?

No. This is automatically done after the filing of your Articles of Incorporation.

What about North Carolina sales and use tax exemption?

NC Non-profits have to pay sales and use tax in this state. But you are able to apply for a refund once every six months. You can do this by submitting a letter requesting non-profit status. This letter must include your NC non-profit’s EIN, the organization’s name, as well as a description of the non-profit’s activities. You will also need to submit Form E-585.

Where do I submit these documents?

North Carolina Department of Revenue
Taxpayer Assistance Division
Nonprofit Sales and Use Tax
PO Box 25000
Raleigh, NC 27640-0640

What happens next?

If the North Carolina Department of Revenue deems your non-profit organization tax exempt then they will issue you a letter of tax exemption. If not, then they will ask that you file corporate franchise and income tax returns.

What about property tax?

All property is subject to property tax unless specifically exempted otherwise. Non-profit organizations that are registered for sales and use taxes are able to purchase tangible personal property for resale without paying tax to their suppliers if they have provided them with the Streamlined Sales Tax Agreement Certificate of Exemption (Form E­ 595E). A non-profit organization that claims exemption or exclusion from the property tax on its property has to file an application so the assessor can determine whether the property falls within the strict definition of the exemption or exclusion for which application has been made. The application for exemption from property tax has to be filed annually.

What if I have more questions about tax exemption in North Carolina?

You can contact:
North Carolina Department of Revenue
Property Tax Division
P.O. Box 871
Raleigh, NC 27602­0871

Additional Resources:

501(c)3 Tax Exempt Status

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. 

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