What is a Nonprofit?
A nonprofit is similar to a corporation, but its purpose is to engage in activities that provide no financial profit to its members.
To qualify properly as a nonprofit, a business must secure tax exempt status from the Internal Revenue Service. The IRS provides a nonprofit organization with a Federal Determination letter that shows the exemption from federal tax.
Nonprofits who wish to have the sales tax exemption must:
- Be recognized by the IRS as a nonprofit,
- File a Nonprofit Application for Sales Tax Exemption (Form NP-20A, available through INTIME), and
- File a Nonprofit Organization’s Report (Form NP-20R) by May 15 every five years in order to remain registered.
Nonprofit FAQs
- How do nonprofit organizations register for a Form NP-20A (Application for Sales Tax Exemption) with the Indiana Department of Revenue (DOR)?
Nonprofit organizations must register for a Form NP-20A, available through INTIME, DOR’s e-services portal, at intime.dor.in.gov, to receive a taxpayer identification number. To register, customers will need to create an INTIME account to access their Form NP-20A. See instructions on creating an INTIME logon.
- Do nonprofit organizations need to register for a Form NP-20A before obtaining a Form NP-1 (exemption certificate)?
Yes. Nonprofit organizations must register with DOR first, then they will be able to obtain a Form NP-1.
- How should nonprofit customers request their Form NP-1?
Effective Jan. 1, 2023, Form NP-1 must be submitted through INTIME at intime.dor.in.gov. To request a paper copy, you will need to complete a Form NP-20A, which includes checking the electronic filing exemption box and providing a reason for the request. You may also call 317-232-0129, Monday through Friday, 8 a.m. – 4:30 p.m. ET for assistance.
- How do nonprofit customers access their Form NP-1 in INTIME?
Nonprofit customers must be registered in INTIME to access their Form NP-1. Customers who are not registered will need to create an INTIME account to access their Form NP-1. See instructions on creating an INTIME logon.
- Why do all nonprofit customers need to complete and provide a Form NP-1 to each of their vendors?
Form NP-1, which can be filed at intime.dor.in.gov, is required to provide documentation that you are registered as a nonprofit with the Indiana Department of Revenue (DOR). Registration confirms that you qualify for tax exempt purchases for your business. Form NP-1 must be completed for each of your vendors.
- How do nonprofit customers with no internet access request a Form NP-1?
To request a paper copy, you will need to complete a Form NP-20A. Check the “electronic filing exemption” box and provide a reason for the request. You may also call 317-232-0129, Monday through Friday, 8 a.m. – 4:30 p.m. ET for assistance.
- What address needs to be included on Form NP-1?
For online purchases, use the corporate office address.
For in-person purchases, use the physical location’s address.
- Do nonprofit customers need to use Form ST-105 (General Sales Tax Exemption Certificate)?
No. Form NP-1 has replaced Form ST-105. Nonprofit customers should not use Form ST-105, as the option for nonprofits has been removed.
- How does this change affect nonprofit customers who have a previously issued Form ST-105?
Previously issued Form ST-105s remain valid through Dec. 31, 2023.
- What is the difference between a Form NP-1 and Form ST-105?
Historically, Form ST-105 was used to collect only part of the information needed to declare tax exemption status. Form NP-1, replaced by Form ST-105, combines both proof of your nonprofit exemption and acts as an exemption certificate. Previously issued Form ST-105s to nonprofit vendors remain valid until Dec. 31, 2023. For-profit businesses can continue using Form ST-105 for claiming exemptions, excluding those for nonprofits.
- The filing frequency for nonprofits has changed. What does this mean for nonprofit customers?
Nonprofit customers must file Form NP-20 (Nonprofit Organization’s Annual Report) for tax year 2021 in 2022 to qualify for the new filing frequency. Form NP-20 is being revised to Form NP-20R (Nonprofit Organization’s Report) after 2022.
The due date for Form NP-20R is based on the last two digits of your Federal Employer Identification Number (FEIN). This also applies to fiscal year filers whose tax years end before Aug. 1, 2022. Form NP-20R will be due on:
- May 15, 2024, if your organization does not have an FEIN or your FEIN ends in 00 through 24.
- May 15, 2025, if your organization’s FEIN ends in 25 through 49.
- May 15, 2026, if your organization’s FEIN ends in 50 through 74.
- May 15, 2027, if your organization’s FEIN ends in 75 through 99.
After the dates shown above, your organization and new nonprofit customers will need to file Form NP-20R by May 15 every fifth year.
See Nonprofit Changes for more information.
- What happens if vendors are not aware of this change?
Vendors should refer to Tax Information Bulletin #10, Application of Sales Tax to Nonprofit Organizations.
- What is the new sales tax collection threshold change for nonprofit customers?
Effective May 4, 2023, nonprofits must collect state gross retail sales tax after exceeding $100,000 in sales during a calendar year or the previous calendar year. This includes sales made by all units operating under the organization’s registration with DOR.
However, the following nonprofits are not subject to these restrictions and are never required to collect sales taxes no matter the amount of sales they make: a church (or other place of worship), monastery, convent, school that is a part of the Indiana public school system, a parochial school regularly maintained by a recognized religious denomination, or a youth organization focused on agriculture.
- Will nonprofit customers need to file Form NP-20 in 2023 for the 2022 calendar year?
No. Fiscal year filers who file Form NP-20 for a fiscal year ending after July 31, 2022, will not need to file an NP-20 during the 2023 calendar year.
- Can out-of-state organizations request a temporary sales tax exemption while visiting Indiana?
Yes. Out-of-state organizations hosting a conference, seminar or educational event in Indiana may request Form NP-20-T (Nonprofit Application for Temporary Sales Tax Exemption). This specially-issued exemption certificate will be a letter issued by DOR.
For more information, see Nonprofit Changes and Tax Information Bulletin #10, Application of Sales Tax to Nonprofit Organizations.
Effective July 1, 2023, if the organization is not on the list of nonprofit exceptions and reaches $100,000 in sales, it must remain registered and collect sales tax each year until the organization makes less than $100,000 for two consecutive years.
If the organization reaches this $100,000 threshold, it must file a Nonprofit Organization Unrelated Business Income Tax form (Form IT-20NP).
Nonprofits that are not required to collect sales tax
The following nonprofits are not required to collect sales tax, even once they’ve reached $100,000 in sales:
- Churches and other places of worship
- Monasteries
- Convents
- Indiana public schools
- Parochial schools regularly maintained by a recognized religion
- Youth organizations focused on agriculture
If a nonprofit reaches $20,000 in sales between January 1 and June 30, 2023, the nonprofit is required to register and collect sales tax. However, effective July 1, 2023, the nonprofit that was required to register because they met the $20,000 threshold may unregister. They would only be required to register when they reach $100,000 in sales in the current or previous calendar year.
Example
Jane operates an after-school youth center in Indianapolis that has a small administrative staff, two counselors, and a bookstore. The center also holds an annual fundraiser for two weeks in the summer.
Since the center and bookstore both have employees, they must register with DOR for withholding tax. The center must also register with DOR as a merchant and collect sales tax at their bookstore and during their fundraiser if it exceeded $100,000 in sales in the current or previous calendar year. They are not required to register and collect tax until the next business day if they did not reach $100,000 in sales in the previous year but exceeded $100,000 in fundraising sales or on a day during the bookstore’s business hours.
The center must file Form NP-20R by May 15 every five years to remain registered.
Form NP-20R will be uploaded to our website soon. For information on due dates, see the Nonprofit FAQs.
Note: This example shows just one possibility for nonprofits; it is not meant to provide legal advice for organizing your nonprofit or any other business.
Forms
| Name | State Form Number | Online Services | Description | Rev Date | File Type |
|---|---|---|---|---|---|
| IT-20NP Booklet | SP 155 | Nonprofit Organization Unrelated Business Income Instruction Booklet | 08/23 | ||
| Form IT-20NP | 148 | Indiana Nonprofit Organization Unrelated Business Income Tax Return | 08/23 | fill-in pdf | |
NP-20RNP-20RNonprofit Organization's Annual Report Form NP-20R must be filed through DOR's e-services portal at INTIME.dor.in.gov. For more information, call 317-232-0129. Click away from this window to close it. | 51062 | INTIME | Nonprofit Organization's Annual Report | 08/23 | INTIME |
NP-20ANP-20ATo register for nonprofit status with the state of Indiana, submit a Nonprofit Application for Sales Tax Exemption (Form NP-20A) through DOR's e-services portal at INTIME.dor.in.gov. For more information, call 317-232-0129. Click away from this window to close it. | 51064 | INTIME | Nonprofit Application for Sales Tax Exemption | 08/22 | INTIME |
| NP-20T | 53090 | Nonprofit Application for Temporary Sales Tax Exemption | 08/22 | fill-in pdf | |
| Schedule IN-UBI | 57071 | Indiana Unrelated Business Income | 08/21 | fill-in pdf |