9 Steps to Keep Your Nonprofit Compliant
To maintain a 501(c)(3) nonprofit corporation in Arizona you must:
- Publish Notice of Incorporation
- Apply for exemption from state taxes
- File Annual Federal Returns for Tax-exempt organizations
- Maintain a Registered Agent
- File periodic reports
- Apply for permits and licenses
- Register/Renew Charitable Registration
- Register with the Arizona Workforce Commission
- Comply with Public Inspection Rules
1. Publish Notice of Incorporation
Within 60 days of formation, you must publish a Notification of Incorporation in a local newspaper for three consecutive publications. In addition, within 90 days of formation, you must file an Affidavit of Publication with the Corporation Commission at:
Arizona Corporation Commission
Corporate Filings Section
1300 West Washington Street
Phoenix, AZ 85007
Note: Nonprofits located in Maricopa and Pima counties are exempt from this requirement.
2. Apply for exemption from state taxes
A. State Income Tax Exemption
Once your organization receives your 501(c) determination letter from the IRS, it is automatically exempt from Arizona corporate income taxes.
B. Transaction Privilege Tax
Generally speaking, most nonprofits will be required to pay the transaction privilege tax when they make any kind of purchase. However, if your nonprofit will be purchasing items for resale, these purchases may be tax-exempt.
Access the Arizona Department of Revenue’s website to learn more about the Transaction Privilege Tax, to determine your organization’s liability, and to obtain instructions about requesting an exemption (if your organization is eligible).
3. 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 (Check the IRS website 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.
4. Maintain a Registered Agent
Any nonprofit that has incorporated must have a registered agent, often called a statutory agent, who has an office address in Arizona. If your registered agent, or their office address, changes, you must file a Statement of Change with the Arizona Corporation Commission so that your Articles of Incorporation may be updated. The Statement of Change can easily be completed online through the ACC’s website.
If you fail to notify the ACC of this change, your corporation may be subject to termination.
5. File Periodic Reports
The Arizona Corporation Commission requires all nonprofits to submit an annual report. This report can be filed online through the ACC’s website. Your organization’s due date will be dictated by the ACC and will be accessible on their website as well.
Failure to file the appropriate reports may subject your organization to termination.
6. Apply for Permits and Licenses
The majority of Arizona nonprofits will not need a state-level general business license of any kind. Business licenses are typically handled at the city or county level. Contact your local city hall or the Department of Revenue to learn more about local requirements.
7. Register/Renew Charitable Registration
Charitable Arizona nonprofits are typically exempt from registering as a charitable organization. However, if your nonprofit is considered to be a Veteran’s Charitable Organization, you will be required to register with the Arizona Secretary of State. To learn more about these registration requirements, access the Veterans Charities Organization page on the Arizona Secretary of State’s website.
8. Register with Arizona Department of Revenue
If your nonprofit will have employees, you will need to register with the Arizona Department of Revenue for both employer withholding and unemployment insurance.
Withholding Tax: http://www.azdor.gov/Business/WithholdingTax.aspx
Unemployment Insurance: https://www.azdes.gov/uitax/
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 Arizona guide.