The District of Columbia Requires DC-Registered Not-for-Profits to Renew Tax Exemptions
Beginning Jan. 1, 2019, DC OTR will start to expire the current DC tax-exempt status of not-for-profits organizations and require all organizations to renew their tax-exemptions every five years. Failure to comply with this renewal process will result in being classified as a fully taxable entity for DC income tax purposes. DC OTR has already started sending out notices to organizations, Notice of Upcoming Exemptions Expiration, informing them of the new requirement. DC OTR will send organizations an additional notice at least 30 days before the actual expiration date of their tax exemptions.
The renewal process requires a not-for-profits organization to log into their respective MyTax.DC.gov accounts and complete the online form FR-164 application. Paper applications will no longer be accepted.
not-for-profits may need to provide the following documents if they are not already uploaded in the MyTax.DC.gov portal:
- If incorporated in DC, a certificate of incorporation is required. If not incorporated in DC, a certificate of registration is required.
- An IRS determination letter. Please note that if the determination letter is more than four years old, the not-for-profits will need to also include an affirmation letter from the IRS. Such a letter must be dated within the past year.
- If applying for sales and use and personal property tax exemptions, a current certificate of occupancy or lease showing proof of physical location in DC.
After a not-for-profits tax-exempt application is approved, DC OTR will provide a new exemption certificate which will have an expiration date. Not-for-Profits organizations will be required to recertify every five years from the date of issuance on the exemption certificate (DC Form FR-164 will need to be completed again online).
Lori Yokobosky, CPA, Partner, Not-for-Profit & Education Practice
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