To maintain a 501(c)(3) nonprofit corporation in Hawaii
1. Apply for exemption from state taxes
A. State income tax exemption
Once your organization receives your 501(c) determination letter from the IRS, your organization will automatically be exempt from paying corporate income tax.
B. State excise tax exemption
If your nonprofit wishes to obtain General Excise Tax exemption, you must fill out form G6 - Application for Exemption from General Excise Taxes and mail it to:
Hawaii Department of Taxation
PO Box 259
Honolulu, HI 96809-0259
Phone: (808) 587-1577
Fax: (808) 587-1584
Web Site: https://tax.hawaii.gov/
Filing Fee: $20
2. Annual Federal Returns for Tax-exempt organizations
A. Annual Federal Returns
Most tax-exempt nonprofit organizations are required to file an annual return with the IRS (Click here for a list of exceptions).
The annual gross receipt amounts for an organization determine which form should be used to file the annual federal return.
‘Gross receipt’ is defined by the IRS as “the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses”
For any questions, contact the IRS at
- (800) 829-3676 (Form related questions)
- (800) 829-1040 (general information)
Q: When is form 990 due?
A: Form 990 is due on the 15th day of the 5th month after the taxable year of the organization comes to an end.
E.g. If the taxable year ends on Dec 31st, form 990 is due on May 15th.
NOTE: If an organization fails to file form 990 for 3 consecutive years, it will automatically lose tax-exempt status.
B. Unrelated Business Income
If an organization has a gross income of >$1000 from a trade or business that is not related to the stated purpose of the organization, then it must file Form 990-T to pay tax on that income.
If your organization expects to pay $500 or more for the year in taxes on unrelated business income, your organization must pay a quarterly estimated tax on the unrelated business income using Form 990-W.
3. Maintain a Registered Agent
Any nonprofit that has incorporated must have a registered agent who has an office address in Hawaii. If your registered agent, or their office address, changes, you must file Form X-14 with the Department of Commerce and Consumer Affairs so that your Articles of Incorporation may be updated. If you fail to notify the Department of Commerce and Consumer Affairs of this change, your corporation may be subject to termination.
4. File Periodic Reports
The Hawaii Department of Commerce and Consumer Affairs requires nonprofits to file an annual report every year by the end of the quarter in which their organization was formed.
State of Hawaii
Department of Commerce and Consumer Affairs
PO Box 40
Honolulu, HI 96810
Phone: (808) 586-2727
Fax: (808) 586-2733
Web Site: www.hawaii.gov/dcca/breg
Filing Fee: $5
Failure to file the appropriate reports may subject your organization to termination.
5. Pay the Hawaii Excise Tax
Every nonprofit that operates in Hawaii will be required to pay a state Excise Tax, unless you have been granted an exemption. There are two filing requirements:
- You need to file Form G-45 (General Excise/ Use Tax Return) with the Hawaii Department of Taxation. Depending on the type of nonprofit, your tax return could be due monthly, quarterly or semi-annually. To learn more about the requirements for nonprofits, check out this Tax Information Release document.
- In addition, on the 20th day of the fourth month following the end of each taxable year, you also must Form G-49 (Annual Return & Reconciliation of General Excise / Use Tax Return).
6. Apply for Permits and Licenses
Although the state of Hawaii doesn’t issue state-level business licenses, you do need to make sure that you’ve submitted Form BB-1 - Basic Business Application, which is a consolidated business tax application.
In addition, some cities and counties may have their own requirements for businesses to operate legally, so you may want to check with your local clerk’s office to see if you need to register with them.
7. Register/Renew Charitable Registration
Charitable Hawaii nonprofits are required to register with the Department of the Attorney General’s Charities Unit if they plan to solicit donations. You can complete this registration online through the Charities Unit’s website.
In addition, your organization will be required to submit an annual financial report to the Attorney General and may be required to pay an annual fee, depending on your nonprofit’s gross revenue for the year.
If your nonprofit will have employees, you will need to register with the Hawaii Department of Taxation for withholding and unemployment insurance taxes. Registration can be completed by using Form BB-1, which you may have completed already. If not, you can complete the form online or via mail.
You can also access contact details for the Department of Taxation on this page of Hawaii's Department of Commerce and Consumer Affairs website.
9. Comply with Public Inspection Rules
To comply with federal regulations regarding 501(c)(3) charities, you will need to release the following documents to any member of the public that requests them:
- Your organization’s annual returns for up to 3 years after the listed due date (including the following Forms: 990-PF, 990-EZ, 990-T, and 990)
- Any supporting documents and attachments for the above 990 forms. However, you only need to include the nature of the contribution and the amount contributed for Schedule B.
- Official IRS paperwork showing your organization is considered to be tax-exempt.
- Your organization’s application for exemption and all supporting documents submitted with your application (including Form 1023).
Your organization does NOT need to share the following documents and information with members of the public:
- Any portion of Form 990/990-EZ’s Schedule B that identify who contributors are.
- Anything considered to be an unfavorable ruling, which can include previous denials of tax-exempt status.
- Any additional information permitted to be withheld by the IRS, including things such as trade secrets, patents, etc.
Recommended:Inform your employees about their rights and stay compliant by posting labor law posters in your workplace.
Q: Can I charge members of the public for copies?
A: Yes, you are permitted to request a reasonable amount to procure copies of requested documents.
Q: If requested, how much time do we have to produce the documents?
A: It is ideal to produce these documents within the same working day. However, if your nonprofit has limited office hours due to the time of year, or you don’t have a physical office at all, you should produce the documents within 14 days.
Q: Do I actually need to provide physical copies of the requested documents?
A: If a member of the public as for copies of documents, whether in writing or in person, you are required to make them available.
NOTE: We recommend that nonprofits make these documents available on their website. That way, anyone who might request copies of these documents can simply head to your website to view and/or download them. This will help your organization remain compliant and save time dealing with these requests personally.
To learn more about forming a nonprofit, check out our How to Start a Nonprofit in Hawaii guide.