The Texas Application for Exemption is a crucial form for nonprofit religious organizations seeking to be exempt from various state taxes, including sales tax and hotel occupancy tax. To qualify, organizations must be established groups that regularly meet for religious worship and adhere to the specific definitions outlined in Texas law. If your organization meets these criteria, consider filling out the form by clicking the button below.
When filling out the Texas Application for Exemption form, there are several important dos and don’ts to keep in mind. This guidance can help ensure that your application is complete and increases the likelihood of approval.
Following these guidelines can facilitate a smoother application process. It is essential to ensure that all information is accurate and complete to avoid unnecessary complications or delays.
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)
*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.
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The Texas Application for Exemption form is an essential document for nonprofit religious organizations seeking tax exemptions. However, several other forms and documents may accompany this application to ensure a smooth process. Below is a list of these important documents, along with a brief description of each.
Gathering these documents can help streamline the application process for tax exemptions in Texas. Each item plays a role in demonstrating the organization's qualifications and commitment to its religious mission.
Filling out the Texas Application for Exemption can be straightforward, but many people make common mistakes that can delay their application. One frequent error is not providing the legal name of the organization. The name must match the one listed in the Articles of Incorporation or the governing document. If this step is overlooked, it can lead to confusion and rejection of the application.
Another mistake involves the mailing address. Applicants sometimes fail to include complete information, such as the street number, city, and ZIP code. Omitting any part of this information can result in delays, as the application may not reach the intended office.
Many applicants forget to include their Federal Employer Identification Number (FEIN) if they are applying based on a federal exemption. This number is crucial for processing the application. Without it, the application may be returned or delayed.
Some people mistakenly check the box indicating that their organization is not registered with the Texas Secretary of State when it actually is. This error can create unnecessary complications. It is essential to verify the registration status before submitting the form.
Another common oversight is in the average attendance section. Applicants sometimes report attendance without considering the number of families represented. If the average attendance is less than 50, this information is required. Failing to provide accurate details can affect eligibility.
Choosing the wrong primary purpose for the organization is also a frequent mistake. The form has specific options, and selecting one that does not accurately reflect the organization's mission can lead to issues with the application. Ensure that the selected purpose aligns with the organization’s activities.
In Section B, applicants may neglect to include necessary supporting documents. For instance, independent or nondenominational churches must provide a statement of faith and details about their worship services. Missing these documents can result in the application being returned.
Some organizations may not include evidence that their services are open to the public. This is a requirement for independent churches. Without proof of public accessibility, the application may not be approved.
Lastly, applicants often forget to provide a contact email or include the wrong email address. If the Comptroller's office cannot reach the applicant, it can delay the notification process. Always double-check the contact information before submitting the application.
By being aware of these common mistakes, organizations can ensure a smoother application process for their Texas Application for Exemption.
Here are nine common misconceptions about the Texas Application Exemption form for religious organizations, along with clarifications for each:
Understanding these misconceptions can help organizations navigate the application process more effectively and ensure they meet the necessary requirements for tax exemption in Texas.
Key Takeaways for Filling Out the Texas Application Exemption Form:
Filling out the Texas Application for Exemption form is a critical step for nonprofit religious organizations seeking tax exemptions. It requires careful attention to detail and the inclusion of specific information. Once you have completed the form, you can submit it along with any required documentation via mail, fax, or email. The review process will determine if your organization qualifies for the exemption.