New Requirements for Nonprofits Claiming Tax Exemptions in the District of Columbia

Regulations recently adopted in the District of Columbia require nonprofits (whether formed under DC law or formed under the laws of another jurisdiction) that enjoy real property, personal property, franchise, or sales tax exemption to re-file with the District once every five years.

If a filing is late, tax will be imposed and if subsequently re-granted, rebates are not expected to be paid.

Among the filing requirements is a requirement that the nonprofit submit an IRS Affirmation Letter dated not more than 365 days prior to the date of filing. Given the backlog in the Exempt Organization Division of the IRS, requesting this letter should not be delayed.

The District has reportedly notified over 14,000 exempt organizations of this new requirement, but if you did not get a notice, it does not mean your organization is exempt from this requirement. Special rules also apply to religious institutions.

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