Tax-Exempt Status Under State Law

This Guide addresses the standards applied by the IRS in determining whether to grant federal tax-exempt status to journalism organizations. Although it is beyond the scope of this Guide, there is a separate issue as to whether a non-profit is exempt from taxation at the state level.

State tax exemptions depend on the laws of the specific states in which a non-profit is organized and/or operates. In general, there are five ways in which states handle their own tax exemptions:

  • No corporate tax exemption for non-profits, normally because the state does not charge corporate taxes at all (there might, however, be exemptions from state sales and other taxes);
  • An automatic exemption granted upon the filing of a non-profit's articles of organization with the state;
  • An automatic exemption upon the non-profit's receipt of a federal Section 501(c)(3) exemption;
  • An exemption upon formal notification of the state that the non-profit has received a federal 501(c)(3) exemption; or
  • A separate state application process for tax-exempt status, independent of federal 501(c)(3) status.

A non-profit should check with the department of taxation or revenue in each state in which it operates to determine how the state handles its tax exemptions.



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