Follow this advice to maintain your Vermont 501(c)(3) Nonprofit Public Charity in good standing.
8 Ways to Keep Your Nonprofit Legal
In order to keep a 501(c)(3) nonprofit company in Vermont, 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
Request permissions and licences
Register your charity with the Vermont Department of Labor.
Follow the Public Inspection Rules.
1. Apply for a state tax exemption.
A. Exemption from state income taxes
Once you obtain your 501(c) decision letter from the IRS, your organisation will be immediately exempt from Vermont corporate income taxes.
B. Exemption from state sales tax
Nonprofits in Vermont may petition for a sales tax exemption by submitting Form BR-400, Application for a Business Tax Account, accompanied with a copy of their Articles of Incorporation. This form may be filled out online or by mail.
Visit the Vermont Department of Taxes’ website to learn more about sales tax exemptions.
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.
If you have any concerns, please contact the IRS at
(800) 829-3676 (Form related questions)
(800) 829-1040 (general information)
FAQ
Q: When is the 990 form due?
A: Form 990 is due on the 15th day of the 5th month after the end of the organization’s fiscal year.
For example, if the fiscal year closes on December 31st, the form 990 is due on May 15th.
NOTE: If an organisation fails to complete Form 990 for three years in a row, it will lose its tax-exempt status.
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 Vermont office location. If you change your registered agent or their office address, you must submit a Change of Registered Agent form with the Secretary of State so that your Articles of Incorporation may be changed.
Your company may be terminated if you fail to inform the Secretary of State of this change.
4. Submit Periodic Reports
The Vermont Secretary of State requires nonprofits to file an initial report between January and April of the calendar year after the formation of the charity. You will be expected to submit reports every two years after the first report. You may submit your report online at the Secretary of State’s website.
Failure to submit the required reports may result in the termination of your company.
5. Obtain Permits and Licenses
Nonprofits are not eligible for state-level business licences in Vermont. Check with your local clerk to see if there are any city/county regulations you must follow.
6. Registration of Charities
Nonprofits in Vermont that want to collect donations are usually excluded from registering as a charity organisation. If your group intends to hold a paid fundraiser, you must submit a solicitation notice with the Vermont Attorney General’s office.
The Attorney General has issued Charitable Nonprofit Board Guidance, which may be relevant to all charitable charities.
7. Sign up with the Vermont Department of Labor.
If your organisation will employ people, you must register with the Vermont Department of Labor.
Registration is simple and may be done online. The Department of Labor’s contact information is also available on their website.
8. 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.