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Tax News
What's new with exempt organizations?

Did you know…there is a streamlined tax-exemption process for organizations with federal 501(c)(3) exempt status?

Assembly Bill 897 (effective January 1, 2008) allows organizations that have already obtained exempt status under IRC Section 501(c)(3) from the Internal Revenue Service, to request state exemption by submitting a copy of the federal determination letter to the Franchise Tax Board.

Organizations can request California acknowledgement of tax exemption from us (under California Revenue & Taxation Code (R&TC) Section 23701d) by sending us a form FTB 3500A Submission of Exemption Request and a copy of the organization's IRC Section 501(c)(3) federal determination letter. Upon receiving the organization's Form 3500A and federal determination letter, we will issue an "Exempt Acknowledgement Letter" advising the organization that we have received its submission. This new letter will also identify the effective date of the organization's California tax-exempt status, which will generally be the same date as the effective date of the federal tax-exempt status under IRC Section 501(c)(3).

This new law does not change any of California's filing requirements for FTB Form 199, California Exempt Organization Annual Information Return; FTB Form 109, California Exempt Organization Business Income Tax Return; or FTB Form 100, Corporation Tax Return.

For more information, refer to the Tax News article published December 2007 and FTB Notice 2008-3.