The Texas Ap 209 form serves as a vital application for non-profit religious organizations seeking exemption from Texas sales tax, hotel occupancy tax, and franchise tax. It outlines the criteria these organizations must meet to qualify, detailing the necessity for a regular congregation meeting for worship services. This exemption is crucial for eligible religious entities looking to maximize their financial resources towards fulfilling their mission. Click the button below to fill out your Texas Ap 209 form and take a step towards securing your organization's tax exemption.
In an increasingly complex legal landscape, the Texas AP-209 form presents a crucial pathway for nonprofit religious organizations seeking tax exemptions within the state. This application, as administered by the Texas Comptroller of Public Accounts, is designed to navigate through the specifics of obtaining exemptions from sales tax, hotel occupancy tax, and, where applicable, franchise tax. The eligibility for such exemptions is fundamentally grounded in the organization's purpose of conducting and sponsoring religious worship according to the established rites of their faith, alongside regular meetings and an established congregation at a designated locale. However, not every organization with religious activities qualifies under this definition, as the law delineates clear boundaries, disqualifying those whose primary objectives do not align with the state's criteria, such as evangelistic associations and other groups whose religious activities are deemed incidental. Additionally, this form opens a dialogue between state regulatory frameworks and federal tax exemption statuses, offering a bridge for organizations exempt under certain sections of the Internal Revenue Code to possibly garner state tax exemptions. The guidelines put forth a detailed process, including necessary documentation and the conditions under which the Comptroller's office may require further information or conduct audits. With an explicit focus on ensuring compliance and verifying the legitimacy of each organization's claim to exemption, the AP-209 form encapsulates a critical administrative procedure tailored to uphold the integrity of religious and religion-based organizations' contribution to society while navigating the intricacies of tax exemption laws.
APPLICATION FOR EXEMPTION
RELIGIOUS AND RELIGION BASED ORGANIZATION
CAROLE KEETON STRAYHORN • TEXAS COMPTROLLER OF PUBLIC ACCOUNTS
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, and 3.541.
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 taxes, 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 taxes 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 taxes for corporations 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 because the hotel tax law does not recognize any federal exemptions.
The laws, rules and other information about exemptions are online at:
http://www.window.state.tx.us/taxinfo/exempt
Send the completed application along with all required documentation to:
COMPTROLLER OF PUBLIC ACCOUNTS
Exempt Organizations Section
P.O. Box 13528
Austin, Texas 78711-3528
We will contact you within 10 working days after receipt of your application to let you know the status of your applica- tion. We may require an organization to furnish additional information to establish the claimed exemption. After a 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 organization at any time during regular busi- ness hours to verify the validity of the organization’s exempt status.
If you have questions or need more information, contact our Tax Assistance staff at 1-800-252-5555 or, in Austin, call (512)463-4600.
You have certain rights under Ch. 559, Government Code, to review, request, and correct information we have on file about you. Contact us at the address or toll-free number listed on this form.
AP-209-1 (Rev.3-05/5)
AP-209-2 (Rev.3-05/5)
TEXAS APPLICATION FOR TAX EXEMPTION
FOR RELIGIOUS AND RELIGION-BASED ORGANIZATIONS
SECTION A
1. ORGANIZATION NAME
• TYPE OR PRINT
• Do NOT write in shaded areas.
Page 1
(Legal name as provided in Articles of Incorporation, or, if unincorporated, the governing document. For out-of-state corporations, name must match the official corporate name as filed in the home state of charter)
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. For TEXAS corporations ONLY, filing information issued by the Secretary of State:
File Number ..............................................
Month
Day
Year
File Date .......................................
5. For NON-TEXAS corporations ONLY, filing information issued by the Texas Secretary of State:
Certificate of Authority File Number .............
File Date ...............................
Home State
of Incorporation .......
Date of
Incorporation ...
Home State Filing
or Registration Number .......
6. Federal Employer's Identification Number (EIN) (Required if applying for exemption on the basis of a federal exemption) ......
7.Average attendance
at worship service ................
If average attendance is less than 50, indicate the number
of families represented in the average attendance ...................
8. Date of first worship service ................................................................................................................................................
Time
Frequency
9. Time and frequency of worship services
10. Name, address and daytime phone number of the person submitting this application.
Name
Title
Organization Name
Daytime Phone (Area code and number)
Extension
Address
City
State
Zip
If address provided is not the same as the organization's mailing address, indicate to which address our response should be mailed:
To organization mailing address
To mailing address of submitter
SECTION B
Provide the following additional 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 web address of the parent organization where your church's affiliation can be verified.
Option B (Independent church or nondenominational church that does not meet the requirements under Option A):
A copy of your organization’s governing document (file-stamped Articles of Incorporation, or Bylaws or Constitution or Articles of Association if not incorporated)
A copy of your group’s statement of faith.
Documentation such as a bulletin, brochure, Web address (URL) or written statement that indicates the regular order of what takes place during the worship services.
A statement containing the physical address (no P.O. Box) and a description of the facility where worship services are regularly conducted. If available, include pictures of the interior and exterior of the facility. If renting or leasing, include a copy of the rental/lease agreement.
A statement confirming the services are open to the public. The statement must indicate how the services are advertised to the public.
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 REQUIRED
UNDER OPTION A OR OPTION B WILL BE RETURNED.
Once you've assembled all the necessary documents and details, completing the Texas Ap 209 form is a critical next step for nonprofit religious organizations aiming to receive a tax exemption from Texas sales tax, hotel occupancy tax, and franchise tax, if applicable. This form is your gateway to securing those exemptions, streamlining your operations, and ensuring compliance. Follow these steps meticulously, submit the required documentation, and remember, the accuracy of the information you provide here is paramount.
In Section B, select the option that fits your organization’s status:
After completing the necessary sections and attaching all required documents, mail your application to the specified address on the form. Within 10 working days after receiving your application, the Comptroller’s office will reach out to inform you of your application’s status. Remember to provide thorough and accurate information to facilitate a smooth process.
The Texas AP-209 form is used by nonprofit religious organizations to apply for exemptions from Texas state taxes. These exemptions can apply to sales tax, hotel occupancy tax, and franchise tax if applicable.
To qualify for a state tax exemption in Texas, a religious organization must be an organized group of people who regularly meet at a specific location with an established congregation. The primary purpose of these meetings should be to hold, conduct, and sponsor religious worship services according to the rites of their sect. Notably, exemption from federal tax is not required to qualify for state tax exemption as a religious organization in Texas.
Exemptions for religious organizations are specified in Sections 151.310, 156.102, and 171.058 of the Texas Tax Code. Further details can be found in Comptroller’s Rules 3.322, 3.161, and 3.541.
No, not all organizations with religious activities are eligible. Specifically, organizations like evangelistic associations, Bible study groups, prayer groups, and revivals may not qualify under the definition of a religious organization for exemption if religion serves only as an incidental purpose. However, these organizations could still qualify for Texas sales tax and franchise tax exemptions under certain sections of the Internal Revenue Code if applicable.
Organizations that have been granted federal tax exemption under specific sections of the Internal Revenue Code will also be granted an exemption from Texas sales tax and, if applicable, franchise tax. The qualifying sections include IRC Section 501(c)(3), (4), (8), (10), or (19) for sales tax exemptions and additional sections for franchise tax exemptions. However, these organizations are not exempt from the hotel occupancy tax since the hotel tax law does not recognize federal exemptions.
Depending on the nature of the organization, required documents can include:
The completed application and all required documentation should be sent to:
COMPTROLLER OF PUBLIC ACCOUNTS Exempt Organizations Section P.O. Box 13528 Austin, Texas 78711-3528
Applicants can expect to be contacted within 10 working days from the receipt of their application regarding the status. Additional information may be requested to establish the claimed exemption.
Yes, the Comptroller or an authorized representative may audit the records of an organization at any time during regular business hours to verify the validity of the organization’s exempt status.
Filling out the Texas Application for Tax Exemption for Religious and Religion-Based Organizations (AP-209 form) requires attention to detail and a thorough understanding of the eligibility criteria. Here are nine common mistakes people make when completing this application:
Not providing the legal name of the organization as it is listed in the Articles of Incorporation, or, for unincorporated entities, as it appears in the governing document. This oversight can cause confusion and lead to processing delays.
Failure to include a complete mailing address, including street number, P.O. Box, or rural route and box number, along with the city, state/province, ZIP code, and county (or country, if outside the U.S.). An incomplete address may result in communication difficulties.
Omitting the Texas Taxpayer number for organizations that have it, which is crucial for identification and processing of the application within the state system.
For Texas corporations, neglecting to provide filing information issued by the Secretary of State, including the file number and file date, can impede verification of the entity’s legal status within the state.
Forgetting to include the Federal Employer's Identification Number (EIN) when applying for an exemption based on a federal exemption. This number is essential for establishing an organization's identity and tax status at the federal level.
Average attendance at worship service is either omitted or inaccurately reported. If the average attendance is less than 50, indicating the number of families represented is critical for verifying the size and legitimacy of the congregation.
Not specifying the date of the first worship service along with its time and frequency. This information helps establish the longevity and regularity of the organization's religious activities.
Providing incomplete or incorrect contact information for the person submitting the application, including their name, title, organization name, daytime phone number, and email. This can delay the processing if clarification or additional information is needed.
Applications received without supporting documentation as required under options A or B for establishing eligibility based on affiliation with a parent organization or as an independent or nondenominational church. Essential documents include governing documents, statements of faith, and evidence of regular worship services.
Ensuring that the application is accurate and complete, including proper documentation and adherence to the defined eligibility criteria, is vital for avoiding delays or rejection of the application for tax exemption.
When applying for a tax exemption in Texas using the Texas AP-209 form, religious and religion-based organizations often need to supplement their application with additional forms and documents. These supporting materials are crucial to establish the organization's eligibility for the exemption. Understanding what each document represents and its function can streamline the process, ensuring a smoother submission and review cycle.
Collectively, these documents form a comprehensive package that supports the application for tax exemption under the Texas AP-209 form. Not only do they validate the organization's religious and nonprofit status, but they also demonstrate compliance with both state and federal requirements for tax exemption. Adequate preparation and organization of these materials can significantly aid in the timely and favorable review of an exemption application.
The Texas AP 209 form shares similarities with the IRS Form 1023, which is used by organizations to apply for recognition of exemption under section 501(c)(3) of the Internal Revenue Code (IRC). Both forms are pivotal for religious and other nonprofit organizations seeking tax-exempt status; however, the Texas AP 209 is specific to state exemptions in Texas, while the IRS Form 1023 applies at the federal level. Both require detailed information about the organization's activities, governance, and proof of nonprofit status but serve to establish tax-exempt status within their respective taxation systems.
The Form 990, often used by tax-exempt organizations to provide the IRS with annual financial information, also shares common ground with the Texas AP 209 form. While the AP 209 form is focused on the application process for tax exemption, Form 990 is about ongoing compliance and reporting. Both, however, ensure that organizations maintain transparency about their operations and continue to meet the requirements set for maintaining their tax-exempt status. This is crucial for the scrutiny and accountability of nonprofit entities.
The Certificate of Formation for Nonprofit Corporations, another critical document in Texas, is akin to the AP 209 form in its foundational role for nonprofit entities. This certificate, filed with the Texas Secretary of State, establishes a nonprofit's legal existence. The AP 209, then, extends this legal recognition into tax exemption territory, emphasizing the documentation of an organization's charitable, in this case, religious, nature while seeking tax relief under Texas law.
IRS Form 990-EZ serves a similar purpose to the more detailed Form 990 but is tailored for smaller organizations, echoing the AP 209's target demographic of smaller, possibly less complex, religious organizations. Where the AP 209 seeks to affirm a religious organization's tax-exempt status in Texas, Form 990-EZ helps smaller entities report their financial activities to the IRS, ensuring their continued compliance and exemption at the federal level.
The Application for Recognition of Exemption under Section 501(c)(4) of the IRC (Form 1024-A), similar to the AP 209 form, is utilized by organizations seeking tax-exempt status, albeit for different purposes (social welfare organizations for Form 1024-A versus religious organizations for AP 209). Both applications play a pivotal role in defining an organization's engagement with state and federal tax codes, delineating the requirements and benefits of gaining tax-exempt status within their specific domains.
The Texas Sales and Use Tax Exemption Certification mirrors the AP 209's intent by offering a pathway for qualifying entities to bypass sales tax, focusing more broadly on various non-profit and tax-exempt organizations, including religious ones. It's an operational tool ensuring that day-to-day purchases are aligned with the organization's tax-exempt status, similar to how the AP 209 secures broader fiscal benefits related to tax obligations in Texas.
The Texas Hotel Occupancy Tax Exemption Certificate, though more narrowly tailored than the AP 209, offers tax relief on the lodging aspect for eligible organizations, including those established for religious purposes. By providing specific exemptions from taxes on hotel stays, it complements the broader scope of the AP 209, which includes an exemption from the hotel occupancy tax among its benefits for qualifying religious organizations.
The Uniform Application for State Charitable Solicitation Registration is a necessary step for nonprofit organizations in certain states that require registration prior to fundraising activities. While this application differs in purpose from the Texas AP 209 form, both are integral to the operational compliance and fiscal responsibility of nonprofit entities, ensuring they are recognized appropriately for tax and legal purposes within their activities, including soliciting donations.
The Internal Revenue Service's Publication 4573, Groups Exemption Letter, while not an application form per se, provides guidance similar in nature to the AP 209's objectives. It lays out the federal process for recognizing a group of organizations, such as churches, as tax-exempt under a central organization's umbrella. This publication, in tandem with documents like the AP 209, enables religious organizations to navigate the complexities of tax exemption from a more informed standpoint.
When completing the Texas AP-209 form for a tax exemption as a religious or religion-based organization, it's crucial to adhere to specific guidelines to ensure the process goes smoothly. Here are 10 key dos and don'ts to keep in mind:
Following these guidelines not only facilitates a smoother application process but also helps prevent potential delays in obtaining your organization’s tax exemption status. Remember, the comptroller's office is there to assist, so make use of their resources if you encounter any issues.
When it comes to filing the Texas Application for Tax Exemption for Religious and Religion-Based Organizations (AP-209 form), there are several misunderstandings that can cause confusion. Let's clarify some of the most common misconceptions:
Understanding these misconceptions and providing the correct information when applying can greatly simplify the process of obtaining tax exemption status for religious and religion-based organizations in Texas.
When completing and using the Texas AP-209 form for religious and religious-based organization tax exemptions, these are the key takeaways:
For assistance or more information, the Texas Comptroller of Public Accounts offers contact through a toll-free number or the direct line in Austin. It's important for organizations to thoroughly review the requirements and provide all necessary documentation to ensure their application is processed smoothly and effectively.
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