We have recently been made aware that new licensing requirements have taken effect in the District of Columbia. These requirements may impact, among other organizations, many nonprofit organizations. Some organizations are required to file by December 31, 2008, so we urge you to review this information to determine whether and when your organization must file.

Requirement:

Beginning December 31, 2008, the District of Columbia will begin requiring all businesses that conduct business in the District of Columbia, are registered with the District of Columbia Office of Tax and Revenue and have a business tax identification number to have a valid District of Columbia basic business license. Even those organizations that are exempt from District taxes will likely have to obtain a basic business license.

According to the website of the District of Columbia Department of Consumer and Regulatory Affairs ("DCRA"), nearly all nonprofit organizations that conduct business in the District of Columbia must obtain a basic business license. Those nonprofit organizations that seek funds solely from their members must obtain basic business licenses with general business license endorsements. Those nonprofit organizations that solicit funding from sources other than their membership (e.g., fundraising campaigns, government resources, grants) must obtain charitable solicitation license endorsements. According to DCRA, any nonprofit organization (except as described below) that does not require a charitable solicitation license endorsement must obtain a general business license endorsement.

Churches appear to be the only type of nonprofit organization not required to obtain a basic business license. In particular, churches do not need to obtain basic business licenses unless they participate in additional activities such as schools, day care centers, soup kitchens, thrift shops or other activities that must be inspected or investigated.

Deadlines:

This new filing requirement has rolling deadlines. For District of Columbia organizations, the deadlines are determined by zip code. The first deadline is December 31, 2008, for organizations with any of these zip codes: 20005, 20012, 20015 or 20019.

For those organizations that do business in the District but are organized under the laws of other jurisdictions (i.e., foreign organizations), the deadlines are determined alphabetically by jurisdiction of formation. Organizations that are incorporated in Alaska, Alabama, Arkansas, Arizona, California and Colorado must file an application by December 31, 2008.

Penalty:

Organizations that fail to submit applications for their business license prior to the required deadline will be subject to a $2,000 penalty by the District of Columbia.

If you need assistance with these new requirements or have any questions, please do not hesitate to contact any member of our nonprofit group.