How to Form a Club in California
|A tax-exempt organization is a unique entity that is almost always a nonprofit organization. However, a nonprofit organization cannot be exempt from California income tax until the organization applies for exemption and the Franchise Tax Board (FTB) issues a determination of exemption.
Non profit tax exempt corporations must file a Form 199, California Exempt Organization Annual Information Return, with the state if your gross receipts are more than $25,000. If you have been in existence for a year, you must file if your gross receipts are more than $37,500. If you have been in existence for 2 years, you must file if average gross receipts are more than $30,000.
Form 199 is due by the 15th of the 5th month after the accounting period ends. If payment is included with the completed and signed form, mail it to Franchise Tax Board, PO Box 942857, Sacramento, CA 94257-0701. Include your California corporation number and the words Form 199 on the check or money order.
If Form 199 can’t be filed by the 15th of the 5th month after the accounting period ends, the exempt organization has an additional seven months to file without filing a written request for extension. However, an organization that is not in good standing or suspended on the original due date of the return will not be given an extension of time to file.
Organizations required to file Form 199 must pay a $10 filing fee. If the $10 is not paid by the due date (including extensions), an additional $15 is assessed. An organization that fails to file the return on or before the original due date (or extended due date), is assessed a penalty of $5 for each month, or part of the month, the return is late. The penalty may not exceed $40.
It is always a good idea for consult a tax accountant when filing your CA Form 199.
This information is provided courtesty Pacific Rim Alliance,