Not all states require nonprofits to pay corporate or franchise taxes, but obtaining a state tax exemption is a smart move to ensure your organization isn’t unnecessarily spending money on taxes. By securing exemptions from state-level corporate and franchise taxes, your nonprofit can allocate more of its funds toward impactful programs and services, rather than tax payments.

State corporate and franchise tax exemptions can provide relief by reducing or eliminating taxes that would otherwise be levied on the income and operations of your nonprofit. These exemptions are generally granted to organizations that are tax-exempt under IRS Section 501(c)(3). While the process for obtaining state tax exemption is typically simpler than applying for federal tax exemption, some states may still require you to submit documentation, such as your IRS Nonprofit Approval Letter, before granting exemption.

Although each state may have slightly different processes and requirements, the general steps for applying for state-level tax exemptions include:

To help you navigate the application process, we’ve compiled a list of state tax departments where you can access information and forms related to nonprofit tax exemptions. Click on your state to get started:

If you’re uncertain about the process or need help navigating your state’s requirements, consider reaching out to your state’s Department of Revenue directly. At Instant Nonprofit, we’re happy to guide you through the general process and point you in the right direction, though we currently do not file these forms on your behalf.