Texas Nonprofit Organization
A Texas nonprofit corporation is created by filing a certificate of formation with the Texas Secretary of State in accordance with the Texas Nonprofit Corporation Act (Chapter 22 of the Texas Business Organizations Code).
The Secretary of State provides a form for a certificate of formation which form meets minimum state law requirements [Form 202]. Online filing of articles of incorporation is provided through SOSDirect.
“Nonprofit corporation” means a corporation no part of the income of which is distributable to members, directors, or officers [Texas Business Organizations Code §22.001 (5)]. A nonprofit corporation may be created for any lawful purposes.
Not all nonprofit corporations are entitled to exemption from state or federal taxes. Corporations organized under the Texas Nonprofit Corporation Law DO NOT automatically qualify for exemption from federal and state taxes.
Before granting a tax exemption, the Internal Revenue Service (IRS) requires that the certificate of formation contain certain provisions. This form does not contain the provisions required by the IRS. If the corporation plans to seek federal tax exemption from the IRS, you may wish to obtain and review the sample language for these provisions contained in a publication called “Tax Exempt Status for Your Organization,” IRS Publication 557.
You may call the IRS at (800) 829-3676 for a copy of the publication or download the publication at the IRS Web site. Additional questions concerning exemption from federal income taxes should be directed to the IRS.
Nonprofit corporations also are subject to state franchise taxes. If the corporation qualifies to be exempt, an application for exemption must be made to the Exempt Organizations Section, Comptroller of Public Accounts, Austin, Texas 78774-0100, (512) 463-4600 or (800) 252-1381. TDD: (800) 248-4099 or (512) 463-4621.
- Visit the Secretary of State Web site for forms and other filing information.
- File and search business documents online using SOSDirect.
- Read the Texas Nonprofit Corporation Law to learn about corporate filing requirements.
- Review the IRS Web site for charitable organizations.
- Learn how nonprofit corporations can apply for an exemption from state taxes, including an exemption from franchise tax.
- Read more about sales tax and other Texas business tax responsibilities.
To review information about other business structures that might suit your needs, return to Step 1: Choose Your Business Structure. Otherwise, continue on to Step 2: Get an Employee Identification Number.