Follow this advice to maintain your Tennessee 501(c)(3) Nonprofit Public Charity in good standing.
Table of Contents
9 Steps to Keeping Your Nonprofit Legal
In order to keep a 501(c)(3) nonprofit company in Tennessee, you must:
Apply for a state tax exemption.
Tax-exempt organisations must file annual federal returns.
Keep a Registered Agent on file.
Submit periodic reports
You must pay the Tennessee Franchise Tax.
Request permissions and licences
Register/Renew Your Charitable Organization
Employees Obey Public Inspection Regulations
1. Apply for a state tax exemption.
A. Exemption from state income taxes
Your organisation will be free from corporate income tax, state franchise tax, and excise tax as a nonprofit.
B. Exemption from state sales tax
To get a sales tax exemption, you must first obtain a Certificate of Exemption from the Tennessee Department of Revenue.
2. Tax-exempt Organizations’ Annual Federal Returns
A. Federal Annual Returns
The IRS requires most tax-exempt charitable organisations to submit an annual return (Check the IRS website for a list of exceptions).
An organization’s yearly gross receipts dictate which form should be utilised to submit the annual federal return.
The IRS defines ‘gross receipt’ as “the total sums the organisation received from all sources throughout its yearly accounting period, before deducting any expenditures or expenses.”
For gross revenues of $50,000 or more, file Form 990-N.
$200,000 in gross income and $500,000 in total assets —- File 990-EZ
If your gross revenues exceed $200,000 or your total assets exceed $500,000, you must file a 990 form.
B. Unrelated Business Profits
If an organisation earns more than $1,000 from a trade or company that is unrelated to the organization’s declared purpose, it must submit Form 990-T to pay taxes on that revenue.
If your organisation anticipates to pay $500 or more in unrelated business income taxes for the year, you must pay a quarterly estimated tax on the unrelated business income using Form 990-W.
3. Keep a Registered Agent.
Any charity that has incorporated must have a registered agent with a Tennessee office location. If your registered agent or office address changes, you must submit Form 401 with the Secretary of State to amend your Nonprofit Corporation Charter.
Your company may be terminated if you fail to inform the Secretary of State of this change.
4. Submit Periodic Reports
The Tennessee Secretary of State requires charities to file annual reports by the first day of the fourth month after the end of their fiscal year. The vast majority of firms conclude their fiscal year on December 31st, which means their annual report is due on April 1st.
For information on filing your annual report online or by mail, visit the Secretary of State’s website.
Failure to submit the required reports may result in the termination of your company.
5. Comply with the Tennessee Franchise Tax
Nonprofit organisations in Tennessee are free from the state franchise tax.
6. Obtain Permits and Licenses
Because licencing is handled at the local level, Tennessee organisations should contact their local clerk’s office to find out what licences and/or permits their organisation may need.
7. Register/Renew Your Charitable Status
The Tennessee Secretary of State will require most philanthropic Tennessee organisations to register. Both registration and renewal may be done online or by mail. More information may be found on the Secretary of State’s website.
Some non-profit organisations are excluded from registering. These organisations often get donations of less than $50,000 per year and are religious, educational, or healthcare-related. The Secretary of State’s website has a complete list of exempt organisations.
You may submit the application form if your organisation wants to petition for an exemption based on the monetary amount it solicits.
8. Apply to the Tennessee Department of Labor and Workforce Development.
If your organisation will employ people, you must register with the Tennessee Department of Labor and Workforce Development. To acquire your employer number, you must complete a Report to Determine Status form.
Registration is simple and may be performed by completing and sending this form. On their website, you may also find contact information for your local workforce commission.
9. Obey Public Inspection Rules
To comply with federal requirements governing 501(c)(3) organisations, you must make the following papers available to any member of the public who wants them:
Annual returns for your organisation may be filed up to three years after the due date (including the following Forms: 990-PF, 990-EZ, 990-T, and 990)
Any supporting documentation and attachments for the 990 forms listed above. For Schedule B, however, you simply need to indicate the kind of the gift and the amount given.
Official IRS documentation demonstrating that your group is tax-exempt.
Your organization’s exemption application and any supporting documentation filed with it (including Form 1023).
Your company is NOT required to share the following papers or information with the general public:
Any part of Schedule B of Form 990/990-EZ that names donors.
Anything deemed an adverse judgement, including past rejections of tax-exempt status.
Any extra information that the IRS is entitled to withhold, such as trade secrets, patents, and so forth.