How To Remain Compliant With Your Hawaii Nonprofit

To maintain your 501(c)(3) Nonprofit Public Charity in good standing in Hawaii, follow this advice.

9 Steps to Keeping Your Nonprofit Legal

In order to keep a 501(c)(3) nonprofit company in Hawaii.

Apply for a state tax exemption.
Tax-exempt organisations must file annual federal returns.
Keep a Registered Agent on file.
Submit periodic reports
The Hawaii Excise Tax must be paid.
Request permissions and licences
Register/Renew Your Charitable Organization
Employees
Follow the Public Inspection Rules.

1. Apply for a state tax exemption.

A. Exemption from state income taxes
Once the IRS issues your 501(c) decision letter, your organisation will be immediately excluded from paying corporate income tax.

B. Exemption from state excise tax
If your nonprofit wants to be exempt from General Excise Taxes, fill out form G6 – Application for Exemption from General Excise Taxes and submit it to:

Hawaii Department of Revenue
Section Technical
PO Box 259
96809-0259 Honolulu, Hawaii

Phone: (808) 587-1577
Fax: (808) 587-1584
URL: https://tax.hawaii.gov/
Fee for filing: $20

2. Tax-exempt Organizations’ Annual Federal Returns

A. Federal Income Tax Returns

The IRS requires most tax-exempt charitable organisations to submit an annual return (Click here 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)

3. Keep a Registered Agent on file.

Any incorporated nonprofit must have a registered agent with an office location in Hawaii. If you change your registered agent or their office location, you must submit Form X-14 with the Department of Commerce and Consumer Affairs so that your Articles of Incorporation may be revised. If you do not inform the Department of Commerce and Consumer Affairs of this change, your company may be terminated.

4. Submit Periodic Reports

Nonprofits in Hawaii are required to submit an annual report by the end of the quarter in which their organisation was created, according to the Hawaii Department of Commerce and Consumer Affairs.

Nonprofits may submit their annual reports either online or by mail, using form D2 and sending it to:

The Hawaiian state
Commerce and Consumer Affairs Department
PO Box 40
96810 Honolulu, Hawaii

Phone: (808) 586-2727
Fax: (808) 586-2733
Website: http://www.hawaii.gov/dcca/breg/
Fee for Filing: $5

Failure to submit the required reports may result in the termination of your company.

5. The Hawaii Excise Tax must be paid.

Unless you have been given an exemption, every nonprofit in Hawaii will be forced to pay a state Excise Tax. There are two criteria for filing:

Form G-45 (General Excise/ Use Tax Return) must be filed with the Hawaii Department of Taxation. Your tax return may be due monthly, quarterly, or semi-annually, depending on the kind of organisation. Check out this Tax Information Release paper to learn more about the rules for NGOs.
In addition, you must file Form G-49 (Annual Return & Reconciliation of General Excise / Use Tax Return) on the 20th day of the fourth month after the end of each taxable year.

6. Request Permits and Licenses

Although the state of Hawaii does not grant state-level business licences, you must file Form BB-1 – Basic Business Application, a consolidated business tax application.

Furthermore, certain towns and counties may have their own criteria for companies to function lawfully, so you should check with your local clerk’s office to determine whether you need to register.

7. Register/Renew Your Charitable Organization

If they want to seek contributions, charitable Hawaii charities must register with the Department of the Attorney General’s Charities Unit. This registration may be completed online at the Charities Unit’s website.

In addition, depending on your nonprofit’s total income for the year, you may be required to file an annual financial report to the Attorney General and may be required to pay an annual fee.

8. Employees

If your organisation intends to hire people, you must register with the Hawaii Department of Taxation to pay withholding and unemployment insurance taxes. Form BB-1, which you may have previously completed, may be used to register. If not, you may fill out the form online or by mail.

On this page of Hawaii’s Department of Commerce and Consumer Affairs’ website, you may also find contact information for the Department of Taxation.

9. Follow the 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.