The Texas Application for Exemption is a form designed for nonprofit religious organizations to request exemption from various state taxes, including sales tax, hotel occupancy tax, and franchise tax. To qualify, organizations must demonstrate they are established groups that meet regularly for religious worship. It is essential for eligible organizations to complete this application accurately to ensure they receive the appropriate tax exemptions.
For further assistance, please fill out the form by clicking the button below.
The Texas Application for Exemption form is essential for nonprofit religious organizations seeking to obtain exemptions from various state taxes, including sales tax, hotel occupancy tax, and franchise tax. This application is specifically designed for organized groups that regularly meet at a designated location with an established congregation, primarily for the purpose of conducting religious worship services. It is important to note that exemption from federal taxes is not a prerequisite for qualifying for state tax exemption as a religious organization. The relevant sections of the Texas Tax Code outline the criteria for exemption, and organizations must adhere to these guidelines to ensure eligibility. While many entities may engage in religious activities, not all will qualify for this exemption, as the law delineates specific definitions and requirements. For instance, evangelistic associations and groups that merely support religious activities without holding regular worship services do not qualify. Organizations that possess a federal tax exemption under certain sections of the Internal Revenue Code may still apply for state tax exemptions based on that status, though they are not exempt from hotel occupancy tax. The application process requires the submission of detailed information about the organization, including its structure, purpose, and worship practices, along with any necessary supporting documentation. Upon submission, the Texas Comptroller's office will review the application and notify the organization of its exemption status. Additional information regarding the application process and requirements can be accessed online.
Texas Application for Exemption
– Religious Organizations
G L E N N H E G A R T E X A S C O M P T RO L L E R O F P U B L I C AC C O U N T S
Nonprofit religious organizations should use this application to request exemption from Texas sales tax, hotel occupancy tax and franchise tax, if applicable. To receive a state tax exemption as a religious organization, a nonprofit religious organization must be an organized group of people regularly meeting at a particular location with an established congregation for the primary purpose of holding, conducting and sponsoring religious worship services according to the rites of their sect. Exemption from federal tax is not required to qualify for exemption from state tax as a religious organization.
The exemption for religious organizations is provided for in Sections 151.310, 156.102 and 171.058 of the Texas Tax Code, and more detailed information can be found in Comptroller’s Rules 3.322, 3.161, 3.541 and 3.583.
Some organizations will not qualify for exemption as a religious organization as that term is defined in Texas' law and rules, even though their activities may be religious in nature. Evangelistic associations do not qualify for exemption as religious organizations. Organizations that simply support and encourage religion as an incidental purpose, or that further religious work or teach their membership religious understanding (such as Bible study groups, prayer groups and revivals) do not qualify for exempt status under this category. Such an organization might still qualify for exemption from Texas sales tax and franchise tax, if applicable, based on their exemption under certain sections of the Internal Revenue Code (IRC).
Texas tax law provides an exemption from sales tax on goods and services purchased for use by organizations exempt under IRC Section 501(c)(3), (4), (8), (10) or (19). However, exempt organizations are required to collect tax on most of their sales of taxable items. See Exempt Organizations–Sales and Purchases, Publication 96-122. Texas law also provides an exemption from franchise tax for organizations exempted from the federal income tax under IRC Section 501(c)(2), (3), (4), (5), (6), (7), (8), (10), (16), (19) or (25).
If your organization has been granted federal tax exemption under one of the qualifying sections listed above, your organization will be granted an exemption from Texas sales tax, or sales and franchise tax, on the basis of the IRS exemption, as required by state law. Organizations that qualify for exemption based on a federal exemption are not exempt from hotel occupancy tax.
The laws, rules and other information about exemptions are online at www.Comptroller.Texas.Gov/taxes/exempt/.
You can submit your completed application along with required documentation by mail, fax, or email
Mail:
Texas Comptroller of Public Accounts
FAX: (512) 475-5862
Exempt Organizations Section
P.O. Box 13528
Email: [email protected]
Austin, Texas 78711
We process applications in the order they are received. To establish claimed exemptions, we may require additional information. After review of the material, we will inform the organization in writing if it qualifies for exemption. The Comptroller, or an authorized representative of the Comptroller, may audit the records of an exempt organization at any time during regular business hours to verify the validity of the organization’s exempt status.
If you have questions or need more information, contact us at 800-252-5555.
You have certain rights under Chapters 552 and 559, Government Code, to review, request and correct information we have on file about you. Contact us at the address or phone number listed on this form.
AP-209-1 (Rev.12-18/12)
AP-209-2 (Rev.12-18/12)
*AP20920W121812*
* A P 2 0 9 2 0 W 1 2 1 8 1 2 *
SECTION A
1. ORGANIZATION NAME
• Remove all staples
• Type or print.
• Do NOT write in shaded areas.
(Legal name as provided in Articles of Incorporation, or, if unincorporated, the governing document.)
2. ORGANIZATION MAILING ADDRESS
Street number, P.O. Box or rural route and box number
CityState/ProvinceZIP codeCounty (or country, if outside the U.S.)
3. Texas taxpayer number (if applicable) ...............................................................................................................
4. a) Enter filing information issued by the Texas Secretary of State:
File number .............................................
OR
Month
Day
Year
File date .......................................
b)
Check this box if this organization is not registered with the Texas Secretary of State.
5. Federal Employer Identification Number (FEIN) (Required if applying for exemption on the basis of a federal exemption) .......
6.Average attendance
at worship service ................
If average attendance is less than 50, indicate the number
of families represented in the average attendance ...................
7. Make only one selection as the organization's primary purpose:
Religious worship services
Ministry
Youth group
Missionary
Bible study
Evangelistic association
8. Date of first worship service
Time
Frequency
9. Time and frequency of worship services................................................
10.Physical address (no P.O. Box) where worship services are conducted
11.Contact information of the person submitting this application
Name
Email address
Organization name
Daytime phone (Area code and number)
Extension
Address
City
State
ZIP code
We will notify you by email when the exemption has been added to let you know where the exemption can be verified online. If an email address is not
provided, indicate where our response should be mailed:
organization's mailing address or
mailing address of the submitter.
SECTION B
Provide the following supporting information as it applies to the appropriate option below:
Option A (Member of a common denomination or convention of churches):
•If your organization is a church that is a member of a common denomination or convention of churches, and the parent organization either has a 501(c)(3) federal group exemption, or has previously obtained a religious exemption in Texas for the churches under its jurisdiction, your church can obtain exemption based on its affiliation with the parent organization. Attach a letter from the parent organization stating that your church is a recognized subordinate, or provide the website of the parent organization where your church's affiliation can be verified.
Name of parent
Parent organization
organization
website
Option B (Independent or nondenominational church):
The following must be included with your application. Information may be in the form of a bulletin, brochure, written statement or website:
•Your organization's statement of faith;
•The regular order of what takes place during worship services (for example, invocation, sermon, hymns, closing prayer);
•Evidence that services are open to the public and how they are advertised to the public;
•A description of the facility where the worship services are regularly conducted (pictures are accepted but not required and will not be returned).
•Special note to unincorporated entities: Include your organization's governing documents, such as the bylaws or constitution.
•Special note to non-Texas organizations: Include a file-stamped copy of your organization's formation documents AND a current Certificate of Existence from the Secretary of State or equivalent officer in your home state.
If your church has its own 501(c)(3) federal exemption, provide a copy of the IRS determination letter along with the information in option A or B so that we may update our records.
Applications received without supporting documentation will be returned.
Completing the Texas Application for Exemption form is essential for nonprofit religious organizations seeking tax exemptions. Once the form is filled out and submitted, the Texas Comptroller's office will review the application and inform the organization of its exemption status. Ensure all required information and documentation are provided to avoid delays.
The Texas Application for Exemption form is a document that nonprofit religious organizations use to request exemption from certain state taxes, including sales tax, hotel occupancy tax, and franchise tax. This form is essential for organizations that meet specific criteria outlined in Texas law to obtain tax-exempt status.
To qualify, an organization must be a group of people who regularly meet at a designated location for the primary purpose of conducting religious worship services according to their sect's practices. It is important to note that not all religiously oriented groups qualify. For example, evangelistic associations and groups that primarily support religion without conducting services do not meet the criteria.
The form allows organizations to request exemptions from:
However, organizations that qualify for exemption based on federal tax status may not be exempt from hotel occupancy tax.
Applicants must provide various supporting documents, including:
For independent or nondenominational churches, additional documents such as bylaws or a Certificate of Existence may be required.
Organizations can submit their completed application and required documentation in several ways:
Applications are processed in the order they are received. The timeframe can vary, and additional information may be requested to establish claimed exemptions. Organizations will receive written notification regarding their exemption status after the review.
The Comptroller or an authorized representative may audit the records of an exempt organization during regular business hours. Organizations should maintain accurate records to verify their exempt status and be prepared to provide any necessary documentation during an audit.
Detailed information regarding exemptions can be found on the Texas Comptroller's website at www.Comptroller.Texas.Gov/taxes/exempt/ . This resource provides comprehensive guidelines and updates on tax exemption policies.
Incomplete Information: Many applicants fail to provide all required information. Ensure that every field in the application is filled out completely. Missing details can lead to delays or rejection.
Incorrect Organization Type: Some applicants mistakenly select the wrong primary purpose for their organization. Carefully choose the option that best describes your organization's activities, as this affects eligibility for exemption.
Missing Supporting Documentation: Failing to include necessary documents is a common error. Depending on your organization type, include statements of faith, worship service details, and evidence of public access to services. Applications lacking these documents will be returned.
Improper Submission Method: Submitting the application through the wrong channel can cause issues. Follow the specified submission methods—mail, fax, or email—and ensure that all required materials are attached.
The Texas Application for Exemption form is essential for nonprofit religious organizations seeking tax exemptions. Along with this application, several other documents may be necessary to support the request for exemption. Here is a brief overview of those documents.
These supporting documents help establish the legitimacy of the organization and its request for tax exemption. Ensure that all required documentation is complete and accurate to facilitate a smooth review process.
The Texas Application for Exemption form is similar to the IRS Form 1023, which is used by organizations seeking federal tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. Both forms require detailed information about the organization’s structure, purpose, and activities. Just as the Texas form requires evidence of a congregation and religious activities, Form 1023 necessitates a clear description of the organization’s mission and how it serves the public interest. Both applications also involve submitting supporting documentation to establish the organization's eligibility for tax exemptions.
Another document that shares similarities is the IRS Form 990, which tax-exempt organizations must file annually. This form provides a comprehensive overview of the organization’s financial activities, governance, and compliance with tax regulations. Like the Texas Application for Exemption, Form 990 aims to ensure transparency and accountability. Both documents require the organization to maintain detailed records and provide information that demonstrates its adherence to the respective tax codes.
The Texas Sales and Use Tax Exemption Certificate serves a similar purpose, allowing qualifying organizations to make tax-exempt purchases. This certificate, like the Texas Application for Exemption, is designed for nonprofit organizations and requires proof of their exempt status. Both documents help ensure that eligible entities do not pay sales tax on purchases related to their exempt activities, thereby supporting their missions more effectively.
The Texas Franchise Tax Exemption Application is another comparable document. This application allows organizations to request exemption from state franchise taxes. Similar to the Texas Application for Exemption, it requires proof of the organization’s status as a nonprofit and its compliance with relevant state laws. Both applications aim to relieve qualifying organizations from certain financial burdens, enabling them to focus more on their core missions.
Furthermore, the IRS Form 1024 is akin to the Texas Application for Exemption in that it is used by organizations seeking recognition as tax-exempt under a different section of the Internal Revenue Code, such as 501(c)(4) or 501(c)(6). Both forms require a detailed account of the organization’s purpose, activities, and governance structure. They also necessitate supporting documents to verify the organization’s eligibility for exemption, ensuring compliance with federal and state tax laws.
The Texas Application for Exemption is also similar to the IRS Form 5768, which allows certain tax-exempt organizations to make an election to engage in lobbying activities without jeopardizing their tax-exempt status. Both documents require organizations to demonstrate their commitment to their exempt purpose while navigating the complexities of tax regulations. They emphasize the importance of maintaining compliance while pursuing advocacy efforts.
The Texas Nonprofit Corporation Certificate of Formation is another related document. This certificate is essential for establishing a nonprofit organization in Texas. It shares similarities with the Texas Application for Exemption in that both require foundational information about the organization, including its purpose and structure. While the Certificate of Formation is focused on the legal establishment of the organization, the Application for Exemption seeks to secure tax benefits based on that established status.
Additionally, the IRS Form 990-EZ is a shorter version of Form 990, designed for smaller tax-exempt organizations. Like the Texas Application for Exemption, it requires organizations to provide financial information and details about their activities. Both forms aim to promote transparency and ensure that organizations comply with the requirements of their tax-exempt status, albeit at different levels of detail depending on the size and complexity of the organization.
The Texas Charitable Organization Registration Application is another document that aligns with the Texas Application for Exemption. This registration is necessary for organizations that solicit donations in Texas. Both forms require organizations to provide information about their missions, activities, and governance. They serve to protect the public by ensuring that organizations operating in Texas adhere to legal standards and are committed to their charitable purposes.
Lastly, the Texas Property Tax Exemption Application for Nonprofit Organizations is similar to the Texas Application for Exemption in that it allows qualifying organizations to request exemption from property taxes. Both applications require proof of the organization’s nonprofit status and its commitment to serving the public good. They help alleviate financial burdens on organizations, allowing them to allocate more resources to their missions and community services.
When filling out the Texas Application for Exemption form, it’s important to follow certain guidelines to ensure a smooth process. Here are five things you should and shouldn’t do:
Following these guidelines will help streamline your application process and improve your chances of obtaining the exemption you seek.
Understanding the Texas Application Exemption form can be challenging, especially with the various misconceptions that often arise. Here are six common misunderstandings about this important document:
Not all religious organizations are eligible for exemption. To qualify, the organization must be a recognized group that regularly meets for worship services. Simply having a religious purpose is not enough.
While having a federal tax exemption can help, it does not automatically grant a state tax exemption. Organizations must still meet specific criteria outlined by Texas law to qualify.
This is incorrect. Evangelistic associations do not qualify for tax exemption as religious organizations under Texas law, even if their activities are religious in nature.
Organizations that primarily focus on Bible study or prayer groups may not qualify for exemption. Their activities must center on regular worship services to be eligible.
Even if an organization qualifies for exemption, it is still required to collect sales tax on most sales of taxable items. This is an important detail that many overlook.
There are different types of tax exemptions under Texas law, including exemptions from sales tax, hotel occupancy tax, and franchise tax. Each type has its own requirements and conditions.
Being aware of these misconceptions can help organizations navigate the application process more effectively. Proper understanding leads to better compliance and helps ensure that the correct exemptions are applied for.
When filling out the Texas Application for Exemption form for religious organizations, there are several key points to keep in mind:
By keeping these points in mind, organizations can navigate the application process more effectively and increase their chances of receiving the desired tax exemptions.