The Texas Application for Exemption – Religious Organizations form is a critical document for nonprofit religious organizations seeking exemption from Texas sales tax, hotel occupancy tax, and franchise tax. Designed for groups regularly meeting with an established congregation for the primary purpose of worship according to their sect's rites, the form outlines eligibility criteria and necessary documentation for obtaining state tax exemptions. Detailed guidance and explanation of the exemptions provided under various sections of the Texas Tax Code can be found within the form and the Comptroller’s Rules.
To learn more about how to properly fill out and submit your Texas Application for Exemption form, please click the button below.
Nonprofit religious organizations in Texas seeking relief from state sales tax, hotel occupancy tax, and if applicable, franchise tax, find an indispensable resource in the Texas Application for Exemption – Religious Organizations. Crafted by the Texas Comptroller of Public Accounts, this application serves as the primary tool for religious entities to assert their eligibility for tax exemption under the state law. It outlines stringent criteria that nonprofits must meet to qualify, emphasizing the necessity for a formal, regular congregation engaged in worship according to the sect's rites. Notably, exemption at the federal level is not a prerequisite for state exemption, making the application accessible to a wider range of organizations. The Texas Tax Code provides a legal foundation for these exemptions, but it also spells out clear exclusions. For instance, evangelistic associations and groups primarily teaching or supporting religious understanding outside of a worship context may not fall under the "religious organization" category for exemptions. However, entities with a 501(c)(3) exemption under the Internal Revenue Code might still secure freedom from Texas sales and franchise taxes. It's vital for organizations to familiarize themselves with the detailed information hosted on the Texas Comptroller's official website, which lays out the comprehensive process for application submission and the stringent documentation requirements. Organizations are reminded of their responsibility to adhere to tax laws concerning sales of taxable items despite their exempt status. Moreover, the application process is meticulous, requiring potential audits and extensive verification to establish an organization's exemption qualification firmly. This underscores the state's commitment to ensuring that only eligible organizations benefit from these tax exemptions.
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: exempt.orgs@cpa.texas.gov
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)
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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.
Ensuring your religious organization benefits from the available tax exemptions in Texas requires accurately completing the Texas Application for Exemption form. This process is critical for religious entities seeking exemption from sales tax, hotel occupancy tax, and franchise tax. The form is designed to verify the eligibility of religious organizations for state tax exemptions. It's essential to follow each step meticulously to provide all necessary information and supporting documents. Once submitted, the application will undergo a thorough review process. The organization will then be informed in writing about the approval of their exemption status.
Section B of the form demands supporting information:
Ensure all required supporting documents are submitted with the application to avoid delays in the process. After submission, the Texas Comptroller’s office will review the materials and contact you regarding the status of your exemption request. It's important to provide a valid email address or specify a mailing address for response delivery to ensure proper communication.
This application allows nonprofit religious organizations in Texas to request exemption from state sales tax, hotel occupancy tax, and franchise tax, if applicable. It is specifically designed for religious entities that conduct regular worship services with an established congregation at a fixed location. The provision for these exemptions is outlined in specific sections of the Texas Tax Code and further detailed in the Comptroller’s Rules.
To be eligible, a religious organization must not only engage primarily in holding, conducting, and sponsoring religious worship services according to the sect’s rites but must also meet the organization criteria defined within Texas law. Organizations that operate with a broader, non-specific religious purpose, such as evangelistic associations or groups primarily focused on activities like Bible studies or revivals, may not qualify under this category.
No, obtaining an exemption from federal tax is not a prerequisite for qualifying for a state tax exemption for religious organizations in Texas. The state has its own criteria and application process independent of the federal exemption status.
The application must be accompanied by supporting documentation that varies based on the church's affiliation. For churches that are part of a recognized denomination, a letter or verification of affiliation with a parent organization is needed. Independent or nondenominational churches must provide their statement of faith, descriptions of worship services, evidence of public services, and a description of the worship facility, among other documents. If applicable, a copy of the IRS determination letter for churches with their federal 501(c)(3) exemption should also be included.
Organizations can submit their completed application and requisite documentation via mail, fax, or email to the Texas Comptroller of Public Accounts. All submissions are processed in the order they are received, and additional information may be requested to establish the claimed exemptions.
The Comptroller’s office will review the submitted material and inform the organization in writing whether it qualifies for the exemption. The Comptroller, or an authorized representative, also reserves the right to audit the records of an exempt organization at any time to verify its exemption status.
Yes, it's important to understand that while an organization might qualify for tax exemption under this program, they are still required by Texas law to collect tax on most sales of taxable items. Additionally, organizations that qualify based on a federal exemption are not automatically exempt from hotel occupancy taxes. The distinctions between qualifications for sales tax, franchise tax, and hotel occupancy tax exemptions necessitate careful review of the specific provisions applicable to each tax type.
Filling out the Texas Application for Exemption for Religious Organizations requires attention to detail and a thorough understanding of the eligibility criteria. Here are six common mistakes to avoid:
Not removing all staples: Before submission, ensure that all staples are removed from the application documents. This might seem minor, but it's a specific requirement.
Omitting or providing incorrect organization mailing address: It's crucial to include the complete and correct mailing address. Failure to do so can lead to delays or misdirected correspondence.
Leaving the Federal Employer Identification Number (FEIN) blank: This number is required if applying for exemption based on a federal exemption. Its absence could invalidate your application.
Forgetting to indicate the primary purpose of the organization: The application allows for only one selection. This declaration guides the evaluation of your exemption status.
Not providing supporting documentation: Whether your organization is member of a common denomination or an independent church, specific supporting documents are required. Applications submitted without this documentation will be returned.
Incorrect or incomplete contact information for the person submitting the application: This may seem straightforward, yet incomplete or incorrect contact details can significantly delay the process.
Applicants should take their time to review the application instructions carefully and double-check their submissions for accuracy and completeness. This helps in avoiding unnecessary delays and facilitates a smoother process for obtaining the necessary exemption.
When filing the Texas Application for Exemption for Religious Organizations, it is vital to accompany this application with other relevant forms and documents to ensure comprehensive compliance and verification. These materials support the application by providing evidence of the organization's legitimacy, structure, financial responsibility, and alignment with both state and federal provisions for tax-exempt status. Understanding each document's role can streamline the application process and enhance the organization's credibility.
Together, these documents furnish a comprehensive profile of the religious organization, substantiating its eligibility for tax exemption under Texas law. Proper preparation and inclusion of these documents with the Texas Application for Exemption for Religious Organizations can facilitate a smoother review process, helping organizations achieve their goals more efficiently.
The Texas Sales and Use Tax Exemption Certification is notably similar to the Texas Application for Exemption for Religious Organizations, as both documents serve the role of requesting tax exemption status in the State of Texas. Specifically, the Sales and Use Tax Exemption Certification is used by organizations to purchase items without paying sales tax, assuming the items are used for a tax-exempt purpose. Like the religious organization exemption application, it requires detailed information about the organization's activities and purpose to ensure compliance with Texas tax laws.
Another related document is the Application for Texas Franchise Tax Exemption, which, akin to the Application for Exemption for Religious Organizations, is utilized by entities to seek exemption from state taxes. The Franchise Tax Exemption application is broader, covering various types of organizations beyond religious ones. It requires organizations to prove their eligibility for exemption based on their operations and charitable, religious, or educational purposes, paralleling the religious exemption application's requirement for detailed operational information.
The Internal Revenue Service (IRS) Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, also shares similarities with the Texas Application for Exemption for Religious Organizations. While Form 1023 is for obtaining federal tax-exempt status and the Texas form is for state exemptions, both demand extensive documentation of the organization's structure, beliefs, activities, and governance to establish their eligibility for tax-exempt status.
The Property Tax Exemption Application for Religious Organizations used by Texas counties is another document paralleling the Texas Application for Exemption for Religious Organizations. This application allows religious organizations to receive exemptions from property taxes for buildings used for worship and other qualifying activities. Both applications require proof of the organization's religious nature and activities, although one focuses on state taxes and the other on local property taxes.
The Charitable Organization or Trust Declaration of Exemption, while not strictly a tax exemption application, shares the purpose of identifying an entity's eligibility for certain benefits based on its operational characteristics. Similar to the religious organization exemption application, it necessitates details about the organization’s purpose, activities, and governance to demonstrate compliance with state laws qualifying it for special status or exemptions, particularly in the realm of state oversight and reporting requirements.
The Application for Exempt Status – Texas Workforce Commission is used by entities to declare exemption from unemployment tax contributions in Texas. It resembles the Texas Application for Exemption for Religious Organizations in its goal of securing a cost-saving exemption based on the nature of the organization's work and its alignment with specific state criteria. Both applications require the organization to substantiate its operations, governance, and alignment with state-defined exempt purposes to gain approval.
When filling out the Texas Application for Exemption – Religious Organizations form, navigating the process smoothly can greatly impact your organization's success in acquiring exemptions. Here are four do's and don'ts to consider:
When discussing the Texas Application for Exemption, specifically for religious organizations, numerous misconceptions can arise due to the complexity of tax laws and exemption criteria. Clearing up these misunderstandings is crucial for religious organizations aiming for compliance and seeking to make the most of the benefits available to them.
This is not accurate. Religious organizations in Texas do need to apply for exemption from sales tax, hotel occupancy tax, and franchise tax using specific forms. While they may qualify due to their religious nature, exemption is not granted automatically and must be applied for through the Texas Comptroller of Public Accounts.
Though having an exemption from federal taxes is beneficial, it does not directly translate to a state tax exemption in Texas. Religious organizations must meet the specific criteria outlined in the Texas Tax Code and complete the application process to receive state exemptions.
Only organizations that have regular, established congregations and conduct religious worship services according to their sect’s rites qualify. Groups such as Bible study groups, prayer groups, and evangelistic associations may not qualify as religious organizations under Texas law, though they may be eligible for other exemptions.
Even if an organization qualifies for a sales tax exemption on purchases for their use, Texas law requires most exempt organizations to collect tax on sales of taxable items they make.
While many may assume that the digital age has made paper applications obsolete, the Texas Comptroller’s Office allows for the exemption application to be submitted via mail, fax, or email, offering flexibility for different organizations' preferences or capabilities.
The Comptroller’s Office has the authority to audit the records of an exempt organization at any time to verify the validity of the organization’s exempt status. This means that maintaining compliance with all relevant regulations is crucial even after exemption has been granted.
Understanding these key points can help religious organizations in Texas navigate the exemption application process more effectively, ensuring that they meet all legal requirements while benefiting from the tax exemptions available to them.
Filling out the Texas Application for Exemption for Religious Organizations can seem daunting at first glance. However, understanding the nuances of the application process can streamline your efforts and ensure your organization receives the appropriate exemptions. Let’s delve into key takeaways that can simplify this process for you.
Eligibility Criteria Matters: To be eligible for state tax exemptions in Texas, a religious organization must not only engage in regular religious worship at a specific location but also have an established congregation. It’s crucial to note that federal tax exemption is not a prerequisite for state tax exemption, underscoring the unique requirements set forth by Texas law.
Understanding the Scope of Exemptions: It’s important to recognize that not all religious-related activities qualify for exemption under Texas law. For example, evangelistic associations or groups primarily supporting religion as an incidental activity do not meet the state’s criteria for exemption. This distinction helps organizations understand the limits and possibilities within the Texas tax exemption framework.
Documentation is Key: The application process requires meticulous attention to detail, especially concerning the submission of supporting documents. This could include anything from statements of faith to evidence of regular public worship services. For independent or nondenominational churches, additional materials like a written statement of the order of worship, disclosure of how services are advertised, and a description of the worship facility are indispensable.
Submissions and Queries: The Texas Comptroller’s office facilitates various submission methods — mail, fax, or email — thereby accommodating diverse organizational preferences and capacities. Moreover, the Comptroller's office remains available for queries, emphasizing their role in supporting organizations through this process. Timely responses to requests for additional information can significantly influence the review time and outcome of your application.
Audit Rights: Awareness and preparedness for potential audits are crucial. The Comptroller, or an authorized representative, retains the right to audit the records of an exempt organization to verify the legitimacy of its exempt status. Ensuring that all documentation and records are in order can prevent any unforeseen complications down the line.
Navigating the intricacies of the Texas Application for Exemption for Religious Organizations requires a clear understanding of state requirements, diligent preparation of supporting documents, and a proactive approach to communication with the Texas Comptroller’s office. Keeping these key takeaways in mind can help make the application process as smooth and efficient as possible.
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