There are many different types of nonprofit organizations in the state of Minnesota. Some will already know how to be exempt from taxes while others may be still in the process of forming and filing to become a nonprofit.
To make things a bit more complicated, some types of nonprofit organizations may not be able to apply for tax-exempt status. Typically, these organizations include fraternities, sororities, homeowners’ associations, adult sports organizations and clubs, social clubs and trade and professional organizations to name just a few.
Generally, with proper documentation and filing with the state, organizations such as churches, private educational facilities, youth or senior organizations and volunteer groups and charitable organizations.
Documentation
A very big part of the process of learning how to be exempt from taxes in the state is to have the necessary documentation. For charities, religious organizations, educational organizations and other qualifying nonprofits, this starts with having filed their articles of incorporation and copies of their 501(c)(3) letters. At the same time, the organization will also have to provide copies of their Federal Form 1023 requesting an exemption from federal taxes.
There will be additional documents required as well to show the activities of the organization or group. This can include bulletins or electronic notices sent to members, information about the board and specific functioning of the charity or organization as well as income and expense statements.
For new organizations, there may not be years of information. However, existing nonprofits should provide as much information as possible extending back over recent years.
Working with a Minnesota nonprofit attorney can help you in preparing the application and ensuring all necessary documentation is provided. This is a simple way to streamline the process and avoid delays due to mistakes on the application.
