File for CA State Tax Exemption
In addition to filing for federal tax-exempt status with the IRS, nonprofit organizations in California must also file for state tax exemption with the California Franchise Tax Board (FTB). This process is separate from the federal filing and requires the completion of the form FTB 3500, Exemption Application. Once the organization has been granted state tax-exempt status, it will be exempt from paying California state income tax.
Tasks
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Prepare the application: The first step in filing for California state tax exemption is to prepare the application. The application form is FTB 3500, Exemption Application. The form requires information about the organization, including its name, address, purpose, and activities. The form also requires information about the organization’s finances, including its sources of income and expenses. The form must be signed by an authorized officer of the organization.
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Gather required documents: In addition to the completed application form, the organization must also submit a copy of its articles of incorporation, bylaws, and any other governing documents.
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Submit the application: The completed application form and required documents must be submitted to the California Franchise Tax Board. The application can be submitted online or by mail. There is no fee to file for California state tax exemption.
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Wait for a determination: After the application has been submitted, the organization must wait for the California Franchise Tax Board to review the application and make a determination on its state tax-exempt status. The FTB aims to process exemption applications within 90 days. Once the organization has been granted state tax-exempt status, it will receive a determination letter from the FTB confirming its exemption from California state income tax.
Cost
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