Nonprofits

0:03
[Visual] A circle with three young people in it wearing blue T-shirts with the word volunteer on two of the T-shirts.
[Audio, narrator speaks] Thousands of nonprofit organizations operate in Washington state. 

0:07
[Visual] A series of images one after the other that include the partial front of a large house with a streetlight in front of it, a pitched roof with a white cross extending above it, a box with aluminum cans and the word food drive on the box.
[Audio, narrator speaks] From student groups to homeowners associations to large scale charities, each has a distinct mission.

0:15
[Visual] A nurse behind a woman in a wheelchair.
[Audio, narrator speaks] Regardless of what your nonprofit does, 
[Visual] Two adults and two children leaning over a plate with money in it.
[Audio, narrator speaks] The rules are similar for all organizations.

0:20
[Audio, narrator speaks] This short video will address some commonly asked questions and, we hope, make it easy for you to find help and answers when you need them.

0:30
[Audio, narrator speaks] Here's what we'll cover in this short video.

0:32
[Audio, narrator speaks] What are the basic rules for nonprofits, and where does yours fit?

0:37
[Visual] A yellow school bus sitting on top of a stack of three books.
[Audio, narrator speaks] What are the tax exemptions?

0:39
[Audio, narrator speaks] Do they apply to your group?

0:42
[Visual] A sheet of paper that is a business license application. 
[Audio, narrator speaks] Should your nonprofit register, and if so, how?

0:47
[Visual] A square with the words “chocolate fundraiser” on it. 
[Audio, narrator speaks] Of course, we'll also direct you to the experts and free resources available from the Department of Revenue and elsewhere.

0:55
[Audio, narrator speaks] In general, nonprofits in Washington state are taxed just like businesses.

0:59
[Audio, narrator speaks] That means nonprofits generally pay sales tax on purchases and collect sales tax on items sold.

1:07
[Audio, narrator speaks] But certain exemptions apply, including fundraising sales.

1:11
[Audio, narrator speaks] More on those later.

1:14
[Visual] A covered can with a slit in the lid and a bill.
[Audio, narrator speaks] Nonprofits may be eligible for property tax exemptions, but ownership and how the property is being used has a lot to do with whether or not the property tax exemption applies.

1:25
[Visual] A small section of the top of a school bus with the words school bus.
[Audio, narrator speaks] To help make this clear, here are some examples of nonprofit organizations that are generally exempt.

1:32
[Visuals] A series of images one after the other of a church steeple with a bell in a cutout of the steeple, a tombstone with a cross-shape, the front of a hospital building, a red ribbon, a woman’s face from the side and a painting behind her, a man’s face and his arm extended toward a canvas, a plate of food and a tray, one hand holding another, a man standing behind a podium and a microphone with another man raising his hand in the air.
[Audio, narrator speaks] Schools, churches, cemeteries, hospitals, social service agencies, museums, arts groups, humanities groups, nursing homes, assisted living facilities, and public meeting halls.

1:51
[Visual] A sign sticking out of the side of a building.
[Audio, narrator speaks] Generally, labor unions or fraternal organizations are not eligible for an exemption unless they're using their property for an activity exempted by law.

2:02
[Visual] A man writing on a whiteboard. 
[Audio, narrator speaks] For example, a training facility operated by a labor union could qualify for an exemption as a school.

2:10
[Visual] A teenage girl with her arms up holding a sign that says car wash.
[Audio, narrator speaks] Fundraising is an area where many questions come up for nonprofits.

2:14
[Audio, narrator speaks] Some things to consider.

2:17
[Audio, narrator speaks] Is this a qualifying nonprofit group?

2:19
[Audio, narrator speaks] Basically a 5O1C3A5O1C4 or A5O1C10 under federal tax law.

2:28
[Visual] A hand with a coin hovering above a can with a hole in the top.
[Audio, narrator speaks] Is the money raised for a nonprofit group?

2:31
[Visual] Two arms holding a sign that says open.
[Audio, narrator speaks] Is this a regular place of business?

2:34
[Visual] A woman’s head and shoulder with a sign that says blood drive behind her.
[Audio, narrator speaks] Is this an ongoing or periodic activity?

2:38
[Audio, narrator speaks] The fundraising must be to further the organization's goals.

2:42
[Visual] Five political campaign buttons arranged in two hands.
[Audio, narrator speaks] It is likely not exempt if funds are used for staff compensation or for political activities.

2:50
[Visual] A ticket.
[Audio, narrator speaks] If your nonprofit conducts taxable business activities in Washington, like ticket sales or gift shop sales, you should register with the Department of Revenue.

3:00
[Visual] A sheet of paper with the Washington State seal and UBI number.
[Audio, narrator speaks] You must register if your group engages in activities that require you to collect sales tax or if your group has more than $12,000 in annual receipts that are subject to the business and occupation tax, commonly called BNO.

3:15
[Visual] A small section of the Department of Revenue’s website homepage.
[Audio, narrator speaks] Most likely, you will do this by filling out a business license application.

3:21
[Visual] The top of a Washington State Business License Application.
[Audio, narrator speaks] To register, file your business license application in addition to registering with the Secretary of State.

3:28
[Visual] The top of a sheet of paper with the Washington State seal and a UBI number on it.
[Audio, narrator speaks] Your group's unified business identifier, or UBI number, becomes your tax reporting and registration number.

3:37
[Visual] The top of a website page that says Nonprofit organizations at the top and a paragraph of text.
[Audio, narrator speaks] To learn more, follow the links in the More Information section below.

3:41
[Visual] A closeup of a woman’s face from the side and a headset microphone in front of her mouth.
[Audio, narrator speaks] We're also happy to answer your questions by phone between 8:00 a.m. and 5:00 p.m. weekdays.

3:48
[Visual] The Department of Revenue logo.
[Audio, narrator speaks] Thank you for watching.