Fr-164 Exemption

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Laurelino Braendel

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Aug 3, 2024, 1:15:56 PM8/3/24

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Organizations must re-certify for the Exemption to File (FR-164) every 5 years from the issuance date of the exemption certificate. Failure to re-certify the FR-164 prior to the expiration date, will result in the organization being placed in a fully taxable status.

MyTax.DC.gov makes it simple, fast, and safe to re-certify and request an exemption certificate online. Need help requesting an exemption certificate? Click on the tutorial/user guide below that provides step-by-step instructions on how to request an Exemption to File (FR-164) certificate via MyTax.DC.gov.

Organizations wishing to apply for or retain an exemption from the District of Columbia on income and franchise tax, sales and use tax, or personal property tax are subject to some new filing requirements. Organizations now must re-certify their qualification for exemption every five years from the issuance date of the exemption certificate, and this includes obtaining an IRS Affirmation Letter of exempt status.

In the District of Columbia, obtaining exemption from the income and franchise tax, sales and use tax, or personal property tax are filed on Exemption to File (FR-164). The following documentation is now required to be submitted with the FR-164:

2. IRS Affirmation Letter. If the IRS Determination Letter date is older than four years from the date of filing, the organization must also attach an IRS Affirmation Letter dated within the past year. (The organization must submit both the IRS Determination Letter and an IRS Affirmation Letter dated within 365 days prior to filing).

In addition to the documents required for all filings, a signed copy of a lease, District of Columbia Certificate of Occupancy permit issued to the organization, or other documentation to show proof of a physical location in D.C. must be submitted with the FR-164.

The D.C. Office of Tax Revenue says that entities will be reclassified as taxable if they fail to renew their exempt status or will be denied exemption if the appropriate paperwork is not submitted with an application.

According to the IRS, in order to obtain an IRS Affirmation Letter, an organization may generally contact IRS Customer Account Services to make a request by phone, letter, or fax. A request must include the organization's:

While an organization may report a name or address change at the same time that it requests an affirmation letter, there are additional forms and requirements required for reporting name and address changes that are not the subject of this alert.

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

Beginning this year, the District of Columbia (DC) Office of Tax and Revenue (OTR) is requiring nonprofit organizations that claim DC tax-exempt status to reapply for tax exemption through an online renewal process. DC OTR has begun sending notices to many organizations informing them about the new requirement. Nonprofit organizations that received determination letters from the Internal Revenue Service (IRS) more than four years ago will need to request an affirmation letter from the IRS confirming their federal tax-exempt status in order to complete the renewal process.

Most nonprofit organizations that are recognized as tax-exempt by the IRS will also qualify for tax-exempt status with DC OTR. To establish DC tax-exempt status, organizations are required to register for taxes with DC OTR and apply for tax-exempt status by filing a DC form FR-164. This has previously been a one-time requirement, and organizations that were recognized as tax-exempt by DC OTR were not required to periodically renew their tax-exempt status.

To complete the renewal process, organizations will need to log into their MyTax.DC.gov accounts and complete the online form FR-164 application for all of their current tax exemptions. DC will no longer accept paper applications for tax exemption. Organizations may need to provide the following documents if they are not already uploaded into MyTax.DC.gov:

However, there has been a notable change to this process in recent years. For exemption certificates issued on or after June 1, 2018, the validity of exemptions granted by DC will now extend only for five years. At the end of this term, organizations are required to file a renewal application to maintain their tax-exempt status. Tax-exempt entities should anticipate receiving a notice 180 days before their exemption expires, followed by a second notice 30 days before the expiration date.

Due to the updated process, it is imperative for nonprofit organizations to be vigilant for expiration notices from the District of Columbia, as many exemption certificates expire in the coming months. It is equally important to prepare and submit renewal requests promptly to avoid any lapse in tax-exempt status.

For organizations based in the United States, you may be subject to state sales tax on payments to Text-Em-All. In this article, you'll learn how state sales tax affects your billing if you live in a taxable U.S. state.

If you believe your organization should be tax-exempt, you'll need to send the documentation required by your state to Text-Em-All. Each state has its own requirements for proof of tax exemption, so be sure you take the time to submit the correct documentation. In general, states don't accept your 501(c) letter from the IRS as proof of exemption.

Scan and email your completed forms to us at taxe...@text-em-all.com. Please use "Nonprofit Exemption Documentation" as the subject line, and include your Text-Em-All username somewhere in the body of the email.

You should provide your existing certificate number and business ID to us at taxe...@text-em-all.com, along with your Text-Em-All username, and we will validate your status via the Connecticut Certificate Validation website.

An organization that is recognized as tax-exempt by the Internal Revenue Service (IRS) is not automatically recognized tax-exempt under the laws of the District of Columbia. In order to establish tax exemption, an organization shall file a Form FR-164 Application for Exemption [PDF] with the Office of Tax and Revenue, Exempt Organizations, PO Box 556, Washington, DC 20044.

You'll need to scan and email your completed forms to us at taxe...@text-em-all.com. Please use "Nonprofit Exemption Documentation" as the subject line, and include your Text-Em-All username somewhere in the body of the email.

Nonprofit organizations in Maryland will need to file a copy of their Maryland Sales and Use Tax Exemption Certificate. This certificate is issued directly from your government. If you need to apply for a certificate from the state of Maryland, you can do so here.

You should provide your existing certificate and/or number to us at taxe...@text-em-all.com, along with your Text-Em-All username, and we will validate your status via the Maryland Certificate Validation website.

The state of Massachusetts requires non-profit organizations to submit a copy of Form ST-2 and a completed ST-5. To obtain a duplicate Form ST-2, contact the Massachusetts Department of Revenue in writing, online, or by phone. Here's a copy of Form ST-5 prefilled with Text-Em-All's information: