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Nonprofit Domicile or “Domestication”

If you want to move your nonprofit state of formation to a different state, your 508 will need to go through the process of changing company domicile (also called “domestication”). You can change the domicile from any state but only into a state that supports domestication.

The advantages of domestication include the ability to apply for sales tax exemption in the state (if available), keeping the same Federal Tax ID (EIN), keeping the same company structure, and, with some states, also keeping the original date of formation. Compared to a simple Foreign Entity Qualification, the disadvantages of domestication include cost and relative complexity of the process.

There are several steps necessary to complete domestication that they vary from state to state:

  1. Typically, the first step after making sure your company is in good standing would be to obtain certified copy of articles and a certificate of good standing from the original state of registration.
  2. Most states require your nonprofit corporation be qualified as a foreign entity in the state.
  3. Then, Articles of Domestication are drafted and filed with the new state.
  4. Fourth step includes dissolution of the entity in the old state (“domesticated out”) and submitting confirmation of dissolution with the state of domestication.

The following states support domestication in one form or another (please note that some states allow domestication of corporations ONLY, and in a few cases statutes of one states do not permit domestication in another, e.g. New York to California and vice versa): Arizona, California, Colorado, Delaware, District of Columbia, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, Nebraska, Nevada, New Hampshire, New Jersey, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming.

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“The I.R.S. examined 1.4 million individual income tax returns in 2010, about 1 percent of the total number filed. In 2018, the latest year with available data when Republicans started making these claims, audits decreased to 370,000, or about 0.2 percent… The budget office estimated increasing I.R.S. funding would return enforcement to its 2010 levels. Doing so would result in about 1.2 million more audits; of those, 583,000 would target people making less than $75,000.”

The New York Times, “Fact-Checking the Misleading Claim About 87,000 Tax Agents”, November 6, 2022

“…For example, you educate believers on national issues that are central to their belief in the Bible as the inerrant Word of God. Specifically, you educate Christians on what the bible says in areas where they can be instrumental including the areas of sanctity of life, the definition of marriage, biblical justice, freedom of speech, defense, and borders and immigration, U.S. and Israel relations. The bible teachings are typically affiliated with the Republican party and candidates. This disqualifies you from exemption under IRC Section 501(c)(3).”

Stephen A. Martin, IRS Director, Exempt Organizations, Rulings and Agreements

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Your contribution helps a church or religious organizations take back their First Amendment religious rights, operate according to their Biblical faith, and protect the privacy of their donors.