In order to avoid paying sales tax on purchases made for their operations, nonprofit organizations in Illinois must first get a tax-exempt certificate. Although the procedure is easy to follow, accurate documentation and close attention to detail are necessary.
Nonprofit organizations must first get a federal employer identification number (EIN) from the Internal Revenue Service (IRS) in order to apply for a tax-exempt certificate in Illinois. An EIN is a special nine-digit number given to organizations and enterprises for tax-related purposes. Applications for EINs from nonprofit organizations can be made online, via mail, fax, or phone. Before filing the application for a tax-exempt certificate, it is crucial to confirm the EIN number to guarantee its accuracy.
The Illinois Department of Revenue will accept applications for tax-exempt certificates once the nonprofit organization has an EIN number. Form STAX-1, Application for Sales Tax Exemption, must be filled out and submitted by the organization. The EIN number, the name and address of the organization, as well as a thorough justification of their exempt purpose, are all required on the form.
For the purpose of determining whether the organization qualifies for a tax-exempt certificate, the Illinois Department of Revenue will analyze the application and any accompanying documentation and may make further inquiries. The certification is valid for five years and the application procedure could take up to 90 days to finish.
To avoid paying sales tax on purchases, nonprofit organizations must renew their tax-exempt certificate before it expires. The organization must send a fresh application and supporting materials to the Illinois Department of Revenue in order to renew the certificate.
In conclusion, nonprofit organizations must get an EIN number from the IRS and file an application to the Illinois Department of Revenue in order to be granted a tax-exempt certificate in Illinois. To demonstrate their eligibility for a tax-exempt certificate, nonprofit organizations must offer accurate, comprehensive information and supporting documentation. To continue benefiting from the tax exemption, the certificate must be renewed before it expires. It is valid for five years. Before filing the application for a tax-exempt certificate, it is also crucial to confirm the EIN number’s accuracy.