TAX NEWS - January 2010

Colorado: Qualify for Exempt Status

To apply to be exempt from state sales tax because an organization is nonprofit or charitable in nature, the organization must first obtain income tax exempt status from the federal Internal Revenue Service (IRS).  See the following IRS publications for the application and more information:

- Package 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code
- Publication 557, Tax Exempt Status for Your Organization
- Form 8718, User Fee for Exempt Organization Determination Letter Request (the fee range can be between $300 to $900)

Visit the IRS Web site at www.irs.gov to obtain these publications and forms, or call 1-800-829-1040.

You must attach a copy of the Federal Determination Letter to the Colorado Application for Sales Tax Exemption for Colorado Organizations (DR 0715). The determination letter must indicate there is an income tax exemption under Internal Revenue Code 501(c)(3). There is no fee for the state sales tax exemption designation.