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The Application Exemption form is a crucial document for organizations seeking tax-exempt status in California. This form helps determine if your organization qualifies for exemptions under state laws related to income tax. Filling it out correctly is the first step toward benefiting from tax-exempt status, so ensure you gather all necessary information before diving in. Don't forget—fill out the form by clicking the button below!

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Article Structure

The Application Exemption form, officially known as Form FTB 3500, is a crucial document for organizations seeking tax-exempt status in California. This form captures essential information about the organization, including its basic identity, operational framework, and financial data. The form necessitates details like the California corporation number, federal employer identification number (FEIN), and contact information for representatives. It also has sections dedicated to the organizational structure, where applicants answer questions about their status as a corporation, trust, or limited liability company, which can influence their eligibility for exemption. Furthermore, applicants must disclose prior tax-exempt status with the Internal Revenue Service, as well as provide a narrative outlining past and present activities related to their mission. Other key aspects include reporting on fundraising activities, financial history, and listing of officers and trustees. Failing to supply required documentation may delay or ultimately deny the request for exemption. Finally, accurate representation and signature under penalties of perjury is required to reaffirm the information provided is truthful and complete. Ensuring that all sections of the form are meticulously filled out can significantly enhance the chances of obtaining the desired tax-exempt status.

							CALIFORNIA FORM
							CALIFORNIA FORM
Exemption Application						3500
Exemption Application						3500

Organization Information
California corporation number/California Secretary of State file number			FEIN

Name of organization as shown in the organization’s creating document				Web address

Street address (suite, room, or PMB no.)

City				State	ZIP code

Telephone		Second telephone		Fax

Representative Information
Name of representative				Email address

Street address (suite, room, or PMB no.)

City				State	ZIP code

Telephone		Second telephone		Fax

General Questions
Part I	Organizational Structure

If the listed documents are not provided, the organization’s request for exemption will be delayed, or denied . Copies are acceptable .

1	.Is this a foreign corporation?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	.□. .Yes. . 1	□No
	See General Information F, Foreign Corporations .
2	Is this a trust?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2	□Yes	□No
	See General Information H, Trusts .
3	Is this a limited liability company (LLC)?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	.□. Yes. . .	□. .No
	See General Information I, Limited Liability Companies .

a Is the parent organization a nonprofit organization? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. .Yes. . .□. No. . . . . . .

If “Yes,” enter parent’s employer identification number (EIN) ___________________

If “No,” STOP, the LLC does not qualify for California tax-exempt status .

4 Are you currently tax-exempt with the Internal Revenue Service? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. Yes. . . .□. No. . . . . . .

5 Are you applying for group exemption? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. . Yes. . . . □. 5No See General Information L, Group Exemption .

Mail form FTB 3500 to: EXEMPT ORGANIZATIONS UNIT MS F120, FRANCHISE TAX BOARD, PO BOX 1286, RANCHO CORDOVA, CA 95741-1286 .

Under penalties of perjury, I declare that I have examined this application, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete.

DATE

SIGNATURE OF OFFICER OR REPRESENTATIVE

TITLE

7221213

FTB 3500 2021 Side 1

If “No,” explain why the organization is not planning any activities .

Organization name: __________________________

Corp number/CA SOS file number:

Part II Narrative of Activities

Was the organization’s California tax-exempt status previously revoked?

. . . . . . . . . . . . . . . . . . . . .

. . . . . . .

. . □. Yes. .

.□. No. . . . . 1

If “No,” the organization may qualify to file form FTB 3500A, Submission of Exemption Request . For more information, get form FTB 3500A .

Enter the California Revenue and Taxation Code (R&TC) section that best fits the organization’s purpose/activity

See the Exempt Classification Chart on page 6

. . . . . . . . . . . . . . . . . . . . .

. . R&TC. . . . Section. . . . 23701. . . .

. . 2

Enter the date the organization formed

. . . . . . . . . . . . . . . . . . . . .

. . . . . ./ .

. .

. / . .

. . . . . . 3

mm /

yyyy

4What is the organization’s annual accounting period ending?

(must end on the last day of the calendar or fiscal year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 . . . . . / . . . . . . . . .

mm / dd

5What is the primary purpose of the organization?

Side 2 FTB 3500 2021

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Organization name: __________________________	Corp number/CA SOS file number:

Part II Narrative of Activities (continued)

7Describe the organization’s past, present, and planned activities below. Do not merely refer to or repeat the language in the organizational document . List each activity separately, in the order of importance based on the relative time and other resources devoted to the activity. Indicate the percentage of time for each activity. Each description should include a:

a Detailed description of the activity, including its purpose and how it furthers the organization’s exempt purpose . b Detailed description of when the activity was or will be initiated .

c Detailed description of where and by whom the activity will be conducted .

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FTB 3500 2021 Side 3


Organization name: __________________________	Corp number/CA SOS file number:

Part III Financial Data

1a Has the organization filed the Form 199, California Exempt Organization Annual Information Return, for the current

and prior years?	1a □Yes	□No
b Has the organization filed the FTB 199N, California e-Postcard, for the current and prior years?	. . . □1bYes	□No

We will review information reported on previously filed Form 199 to determine exemption eligibility. If the FTB 199Ns were filed or no returns were filed, attach a detailed income and expense statement for the current year and three previous years . If you are not yet active, attach a proposed budget covering the next four years .

Part IV Officers, Directors, and Trustees

1List names, titles, and mailing addresses of all officers, directors, and trustees whether or not compensation is or will be paid . For each person listed, state their total annual compensation, or proposed compensation, for all services to the organization, whether as an officer, employee, or other position . Use actual figures, if available . Enter “none” if no compensation is or will be paid . If additional space is needed, attach a separate sheet .

Name

Title

Mailing Address

Compensation Amount (annual actual or estimated)

2Will any incorporator, founder, board member or other person(s) or entity:

a Share any facilities with the organization?

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. a.

. □. Yes. .

. .□. No

b Rent, sell, or transfer property to this organization?

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

□Yes

□No

c Be compensated for services other than performing as a board member or employee?

□Yes

□No

Part V

History

. . . . .

1 Has the organization been issued any previous California ID number?

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. .□. Yes. .

. □. .No.

Was this organization’s exemption previously revoked by the Internal Revenue Service?

. □. .Yes. .

. □. No. . 2

If “Yes,” enter date revoked

yyyy

Part VI

Fund Raising

Does or will the organization participate in fund-raising activities? . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . .

. .□. .Yes. □. 1No. .

If “Yes,” check all the fund-raising programs the organization conducts, or will conduct .

□ Mail solicitations

□ Phone solicitations

□ Email solicitations

□ Accept donations on the organization’s website

□ Personal solicitations

□ Receive donations from another organization’s website

□ Vehicle, boat, plane, or similar donations

□ Government grant solicitations

□ Foundation grant solicitations

□ Other - Attach description

Side 4 FTB 3500 2021

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Organization name: __________________________		Corp number/CA SOS file number:

Part VII Specific Activities

1	Does the organization conduct any gaming activities (bingo, raffles, etc .) .	. . . . . . . . . . . . . . . . . . . . . . .	. . .	. . . . . . . . .		.	. .	.	. .	.		1 □Yes □No

2	Does the organization lease property from others?	. . . . . . . . . . . . . . . . . .	. .	. . . . .	. . .	.	.	.	.	. .		. . .□. Yes. . . .	□. . No. 2
	If “Yes,” attach copy of lease agreement .

3	Does the organization lease property to others?	. . . . . . . . . . . . . . . . . . . . . . .				.	.	.	.	.	.	. . □. Yes. . .	.□. No
	If “Yes,” attach copy of lease agreement .

4	Does or will the organization publish, sell, or distribute any literature? . . .	. . . . . . . . . . . . . . . . . . . . . .	. . .	. . . . . .	. . .	.	. .	.	. .	.	.	4 □Yes	□No

5	Does or will the organization own, or have rights in music, literature, tapes, artworks, choreography, scientific discoveries,											. . □. Yes. . .	.□. No
	or other intellectual property?	. . . . . . . . . . . . . . . . . . . . . . .				.	.	.	.	.	.	. . □. Yes. . .	.□. No

6Does or will the organization accept contributions of real property, conservation easements, closely held securities, intellectual

property such as patents, trademarks, and copyrights, works of music or art licenses, royalties, automobiles, boats, planes, or

other vehicles, or collectibles of any type? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. Yes. . . .□. No. . . . . . .

7Does or will the organization operate outside of the United States? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .□. Yes. . . □. .No. . . . . . .

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FTB 3500 2021 Side 5

Organization name: __________________________

Corp number/CA SOS file number:

Schedule 1

Section A R&TC Section 23701a – Labor, agricultural, or horticultural organization

1 Are any services to be performed for members? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. . .□. Yes. . . . □. . No If “Yes,” explain .

2	Is the organization formed as a cooperative?
	If “Yes,” provide a copy of the federal exemption letter showing exemption under IRC Section 501(c)(5)	2 □Yes □No

Section B R&TC Section 23701b – Fraternal societies, orders, or associations, etc. (Lodge system with benefits)

Operating under the lodge system means carrying on activities under a form of organization that comprises local branches called lodges, chapters, or the like, that are largely self-governing and chartered by a parent organization .

1 Is the organization a college fraternity or sorority or a chapter of a college fraternity or sorority? . . . . . . . . . . . . . . . . . . . . . . . 1 □Yes □No

If “Yes,” college fraternities and sororities generally qualify as organizations described in R&TC Section 23701g .

For more information, get FTB Pub 1077, Guidelines for Social and Recreational Organizations . If R&TC Section 23701g appears to apply, do not complete Section B . Go to Section G on Schedule 3, Social and recreational organization .

2Does the organization operate, or plan to operate under the lodge system or for the exclusive benefit of the members of

	the lodge system?	. . . . . 2	□Yes	□No

3	Is the organization a subordinate of a national or state level organization?	. . . . 3.	. □. .Yes. .	. □. No
	If “Yes,” attach a certificate signed by the secretary of the parent organization certifying that the subordinate is a duly
	constituted body operating under the jurisdiction of the parent body.

4	Is the organization a parent or grand lodge?	. . . . . 4	□Yes	□No

5Describe the types of benefits (life, sick, accident, or other benefits) paid, or to be paid, to members .

Section L R&TC Section 23701l – Fraternal beneficiary societies, orders, or associations, etc. (Lodge system with no benefits)

Operating under the lodge system means carrying on activities under a form of organization that comprises local branches (called lodges, chapters, or the like) that are largely self-governing and chartered by a parent organization .

1 Is the organization a college fraternity or sorority, or a chapter of a college fraternity or sorority? . . . . . . . . . . . . . . . 1. . □. .Yes. . . □No

If “Yes,” college fraternities and sororities generally qualify as organizations described in R&TC Section 23701g .

For more information, get FTB Pub 1077, Guidelines for Social and Recreational Organizations . If R&TC Section 23701g appears to apply, do not complete Section L . Go to Section G on Schedule 3, Social and recreational organization .

2Does the organization operate or plan to operate under the lodge system or for the exclusive benefit of the members of

	a lodge system?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. .	.□. .Yes. . .	□No

3	Is the organization a subordinate of a national or state level organization?	. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.	. □. .Yes. . . □. No

4	Is the organization a parent or grand lodge?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4	□Yes	□No

Side 6 FTB 3500 2021

7226213


Organization name: __________________________	Corp number/CA SOS file number:

Schedule 2

Section D R&TC Section 23701d – Religious, charitable, scientific, literary, or educational organization

1Check the box(es) below that best describes the organization .

□ Charitable	□ Educational	□ Credit Counseling
□ Synagogue	□ School	□ Testing for public safety
□ Church	□ Literary	□ Hospital, Medical Center
□ Temple	□ Scientific	□ Qualified sports organization
□ Mosque	□ Religious	□ Prevent cruelty to children or animals

2Has the organization received or expect to receive 10% or more of its assets from any organization or group of affiliated organizations (affiliated through stockholding, common ownership, or otherwise), any individuals, or members of a family

	group (brother or sister whether whole or half blood, spouse/RDP, ancestor or lineal descendant)?	2	□Yes	□No

3	Does the organization attempt to influence legislation?	3. . .	□. Yes. . . .	□. . No

4Does the organization support or oppose candidates in political campaigns in any way? . . . . . . . . . . . . . . . . . . . . 4. . □. Yes. . . .□. No.

5Does the organization hold, or plan to hold, 10% or more of any class of stock or 10% or more of the total combined

	voting power of stock in any corporation?		. 5. .	.□. .Yes.	□No

6	a	Does the organization operate as a church, mosque, synagogue, or temple?	.6a. .	.□. .Yes	□No
		If “Yes,” complete Schedule 2A, Churches .
	b	Is the organization’s main function to provide hospital or medical care?	6b	□Yes	□No
		If “Yes,” complete Schedule 2B, Hospitals .
	c	Is the organization a credit counseling organization?	6c	□Yes	□No
		If “Yes,” complete Schedule 2C, Credit Counseling Organizations .

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FTB 3500 2021 Side 7

Organization name: __________________________

Corp number/CA SOS file number:

Schedule 2A – Churches

Complete Schedule 2A only if the organization answered “Yes” to Specific Section D, Question 6a .

1Check the box that best describes the organization .

	□Church □Mosque □Synagogue	□Temple
2	Has a place of worship been established?	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. Yes. . . .□. No
	If “Yes,” at what address? Who is the legal owner of the property? Other property use?
	If “No,” explain where religious services are held .

3 Does the organization have a regular congregation or conduct religious services on a regular basis?. . . . . . . . . . . . . . . . . . . . 3 □Yes □No If “Yes,” how many usually attend the regular worship services? How often are religious services held?

If “No,” explain .

4Explain the background and training of the religious leaders .

5Will income be received from incorporators, ministers, officers, directors, or their families? . . . . . . . . . . . . . . . . . . . . □. Yes. . . .□. No5 If “Yes,” explain, including dollar amounts received .


6	Will any founder, member, or officer take a vow of poverty? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .□. Yes. . . □. .No
	If “Yes,” explain .

7Will any founder, member, or officer transfer personal assets to this organization, like a home, automobile, furnishings,

business, or recreational assets, etc ., that will be made available for the personal use of the donors? . . . . . . . . . . . . . . . □. .Yes. . 7□No If “Yes,” explain .

Side 8 FTB 3500 2021

Schedule 2A Churches continued

7228213


Organization name: __________________________	Corp number/CA SOS file number:

Schedule 2A – Churches (continued)

8Will any founder, member, or officer assign or donate income to the organization that will be used to pay their own personal salary, living allowance, or that will result in any other personal benefit (such as food, medical expenses, clothing,

	insurance, etc .)?	8 □Yes □No
	If “Yes,” explain .

9	Does the organization have a written creed, statement of faith, or summary of beliefs?	9 □Yes □No
	If “Yes,” explain .

10	Do the religious leaders conduct baptisms, weddings, funerals, etc .?	10. . . .□Yes □No
	If “Yes,” explain .

11	Does the organization ordain, commission, or license ministers or religious leaders?	11 □Yes □No
	If “Yes,” describe .

7229213

FTB 3500 2021 Side 9

Organization name: __________________________

Corp number/CA SOS file number:

Schedule 2B – Hospitals

Complete Schedule 2B only if the organization answered “Yes” to Specific Section D, Question 6b . Attach a statement to explain any answers .

1	Are all the doctors in the community eligible for staff privileges?	1 □Yes □No
	If “No,” give the reasons why and explain how the medical staff is selected .

2a Does or will the organization provide medical services to all individuals in the community who can pay for themselves

or have private health insurance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a. . . □. Yes. . . □. .No. . . . . . .

If “No,” explain .

bDoes or will the organization provide medical services to all individuals in the community who participate in

Medicare? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . □. Yes. . . .□. No. . . . . . .

If “No,” explain .

3a Does or will the organization require persons covered by Medicare or Medicaid to pay a deposit before receiving

		services?	3a	□Yes	□No
		If “Yes,” explain .
	b Does the same deposit requirement, if any, apply to all other patients?		3b	□Yes	□No
		If “No,” explain .
4	a	Does or will the organization maintain a full-time emergency room?	4a	□Yes	□No
		If “No,” explain why the organization does not maintain a full-time emergency room . Also, describe any emergency
		services provided .
	b	Does the organization have a policy on providing emergency services to persons without apparent means to pay? . . . .	4b. .	□Yes	□No
		If “Yes,” provide a copy of the policy.

cDoes the organization have any arrangements with police, fire, and voluntary ambulance services for the delivery

		or admission of emergency cases?	. . .	.□. Yes. . 4c □No
		If “Yes,” describe the arrangements, including whether they are written or oral agreements . If written, submit copies of
		all such agreements .
5	a	Does the organization provide for a portion of the organization’s services and facilities to be used for charity patients? . . .	5a	□Yes	□No
		If “Yes,” answer question 5b through question 5e .
	b	Explain the organization’s policy regarding charity cases, including how the organization distinguishes between charity
		care and bad debts . Submit a copy of the written policy.
	c	Provide data on the organization’s past experience in admitting charity patients, including the amounts expended for
		treating charity care patients and types of services provided to charity care patients .
	d	Describe any arrangements with federal, state, or local governments or government agencies for paying for the cost
		of treating charity care patients . Submit copies of any written agreements .
	e	Does the organization provide services on a sliding fee schedule depending on financial ability to pay?	5e	□Yes	□No
		If “Yes,” submit the sliding fee schedule .
6	a	Does or will the organization carry on a formal program of medical training or medical research?	6a	□Yes	□No
		If “Yes,” describe such programs, including the type of programs offered, the scope of such programs, and affiliations
		with other hospitals or medical care providers with which the organization carries on the medical training or research
		programs .
	b	Does or will the organization carry on a formal program of community education?	. . .	.□. Yes6b	□No
		If “Yes,” describe such programs, including the type of programs offered, the scope of such programs, and affiliations
		with other hospitals or medical care providers with which the organization offers community education programs .

Schedule 2B Hospitals continued

Side 10 FTB 3500 2021

7229213

Get Application Exemption PDF Form

Fact Name	Description
Purpose of the Form	The Exemption Application Form is used by organizations seeking tax-exempt status in California.
Governing Law	The form is governed by California Revenue and Taxation Code, section 23701.
Eligibility Criteria	Organizations must demonstrate eligibility, including being a corporation, trust, or LLC, and may need to provide additional documentation.
Submission Process	Completed forms must be mailed to the Franchise Tax Board at the specified address in Rancho Cordova, CA.
Previous Revocation	If an organization previously had its tax-exempt status revoked by the IRS, it must disclose this on the form.

Filling out the Application Exemption form is an important step for an organization seeking tax-exempt status in California. After you complete the form, you will need to submit it to the appropriate office to have your request processed. Make sure all sections are filled out accurately, as incomplete or incorrect information could delay your application or result in a denial.

Start with the Organization Information section. Fill in the California corporation number, FEIN (Federal Employer Identification Number), and the name of the organization as it appears in the founding documents. Provide a web address, street address (including suite or room number), city, state, ZIP code, and telephone number. Include any additional telephone or fax numbers if applicable.
In the Representative Information section, enter the name of the representative and their email address. Fill out their street address, city, state, ZIP code, and telephone numbers, ensuring to add any additional contact numbers needed.
Move to General Questions. Answer all questions regarding organizational structure. Indicate whether the organization is a foreign corporation, trust, or limited liability company (LLC). Follow the instructions to provide additional details if applicable, such as the parent organization’s EIN.
For the Narrative of Activities section, describe the organization’s purpose and any planned activities. Enter the date of formation and provide the organization’s annual accounting period. Make sure to outline any past, present, and planned activities, detailing how each activity aligns with the organization's exempt purpose.
In the Financial Data section, confirm if the organization has filed the necessary annual information returns. If not yet active, include a proposed budget covering the next four years.
Fill out the Officers, Directors, and Trustees section by providing the names, titles, mailing addresses, and compensation amounts for all relevant personnel, whether or not compensation will be paid.
Proceed to the History section. Answer questions regarding any previous California ID numbers or prior exemptions for the organization.
In the Fund Raising section, indicate if the organization will participate in fundraising activities and detail the types of fundraising programs it plans to conduct.
Complete the Specific Activities section by answering questions about gaming activities, property leases, literature distribution, and whether the organization will accept contributions of various assets.
Finally, review all filled-out sections for accuracy. Ensure that the required declarations are signed and dated by an officer or representative of the organization before submission.

After double-checking every detail, mail the completed form to the address listed at the end of the instructions. This step is crucial for ensuring that the application is processed efficiently. Keep a copy of the submitted form for your records. Good luck with your application!

What is the Application Exemption form used for?

The Application Exemption form is designed for organizations seeking to obtain tax-exempt status in California. By completing and submitting this form, organizations can formally apply for exemptions from state taxes, provided they meet the necessary criteria as outlined in the tax laws. Completing this form accurately is crucial to avoiding delays or denials in the exemption process.

Who needs to fill out the Application Exemption form?

Any organization that wishes to be recognized as tax-exempt in California must fill out this form. This includes foreign corporations, trusts, limited liability companies (LLCs), and nonprofit organizations. If an organization falls under these classifications, it is essential to complete the form to comply with state regulations and secure tax benefits.

Can organizations outside of California apply for exemption?

Yes, foreign corporations can apply for California tax-exempt status through this form. However, they must provide adequate documentation that demonstrates compliance with both California and federal tax laws. This includes understanding the specific regulations that apply to foreign entities operating within the state.

What happens if the required documents are not submitted with the form?

If an organization fails to submit the necessary documents along with the Application Exemption form, the request for exemption may be delayed or denied. To avoid this issue, it's important to ensure that all required documents are included and are clear, accurate copies of the originals.

What is the significance of the representative information section?

The representative information section allows the organization to designate an individual who will act on its behalf during the exemption application process. This can facilitate communication between the organization and the California Franchise Tax Board, which reviews the application. Including an accurate representative can help streamline the process and prevent potential misunderstandings or delays.

Is prior tax-exempt status necessary to apply?

No, prior tax-exempt status is not required to apply for new tax-exempt status. Organizations that have never been tax-exempt can still fill out and submit the Application Exemption form. However, if the organization’s tax-exempt status was previously revoked, additional information will be needed.

What should organizations include in their narrative of activities?

The narrative of activities must describe past, present, and planned activities in detail. Organizations should provide a clear explanation of each activity, including its objectives, how it supports the organization’s exempt purpose, and relevant timelines. This detailed description helps demonstrate how the organization meets the criteria for tax-exempt status by outlining its charitable or nonprofit purposes.

How should organizations report their financial data?

Organizations must report their financial data accurately, including whether they have filed previous California Exempt Organization Annual Information Returns. If applicable, a detailed income and expense statement for both the current year and the past three years must accompany the application. If the organization has yet to start activities, a proposed budget for the next four years should be attached.

What if an organization participates in fundraising activities?

If an organization participates in fundraising activities, it should indicate this on the form and provide details about the various fundraising programs it conducts or plans to conduct. Accurate reporting of fundraising efforts is essential, as it reflects the organization’s operations and compliance with applicable tax laws.

When will the organization hear back about its application status?

The timeline for receiving a response regarding the Application Exemption form can vary. After submission, the California Franchise Tax Board will review the application and any accompanying documents. Organizations should expect a response within a few weeks, though it may take longer if there are issues or if additional information is needed.

Filling out the California Application Exemption form can be a crucial step for organizations seeking tax-exempt status. However, several common mistakes can lead to delays or even denials of the application. Awareness of these missteps is essential for a smoother process.

One frequent error is skipping the requirement to provide all necessary documents. If the listed documents do not accompany the application, the request for exemption will be delayed or denied. Applicants must understand that submitting copies is acceptable, but they should ensure that all requested materials, including formation documents and financial statements, are included.

Another common mistake occurs in Part I, where the applicant must accurately identify the organizational structure. Some individuals mistakenly check “Yes” for multiple categories, such as indicating that an organization is both a foreign corporation and a trust. This ambiguity can cause confusion and may lead to improper processing of the application.

Failure to accurately describe the organization’s activities is a major issue. In Part II, applicants must provide a narrative detailing past, present, and future activities. Many applicants simply repeat language from their organizational documents instead of offering comprehensive descriptions. Each listed activity should be detailed separately, emphasizing its importance to the organization’s purpose.

Another oversight occurs when filling out financial data. In Part III, applicants often neglect to provide necessary information about filings made in previous years. This includes failing to report whether the organization has submitted the Form 199 or the FTB 199N. Providing a clear financial history is vital for the review process.

In Part IV, some applicants forget to list all officers, directors, and trustees, regardless of whether they will be compensated. Moreover, failing to include total compensation amounts leads to incomplete information that can hinder the application’s approval.

Lastly, applicants sometimes overlook the importance of clearly stating plans for fundraising activities in Part VI. Accurately describing current and planned fundraising initiatives is essential. A lack of clarity in this area can lead to questions about the organization’s operations and purpose, resulting in potential delays.

Understanding these common mistakes can simplify the application process. By taking care to provide complete and accurate information, organizations can increase their chances of obtaining the tax-exempt status they seek.

When submitting the Application Exemption form, there are several important documents and forms that may be required to support your application. Each of these plays a crucial role in determining your organization’s eligibility for tax exemption. Here’s a helpful list of commonly required documents.

FTB 3500A: This form is used for organizations that are applying for tax exemption after having previously been denied or having their status revoked. It summarizes the necessary details for exemption review.
Form 199: This is the California Exempt Organization Annual Information Return. It provides financial and operational information for the organization for review by the state.
FTB 199N: The California e-Postcard is a simpler filing method for smaller organizations. It gathers essential information about non-profit organizations that may qualify for a streamlined review process.
Organizational Bylaws: These documents outline how your organization is structured and governed. They typically detail board duties, membership information, and other operational procedures.
Articles of Incorporation: This document establishes your organization’s existence in California and includes essential details like the organization’s purpose and structure. It needs to be submitted to the Secretary of State.
Financial Statements: These are crucial for demonstrating the financial health of your organization, especially if you are requesting a group exemption. These can include income statements and balance sheets.
IRS Determination Letter: If your organization is already recognized as tax-exempt by the IRS, providing this letter can expedite the state review process and confirm your status.
Budget Plans: If your organization is not yet active, you may need to provide a proposed budget covering expected income and expenses for the next few years. This helps demonstrate financial viability.

Having these documents ready and properly filled out can significantly improve your chances of a successful exemption application. Make sure to review all content for accuracy before submission. Good luck!

The Application Exemption form is a crucial document for organizations seeking tax-exempt status in California. Similar application forms share essential elements such as organizational information, representative data, and various requests for classification. Below are nine documents that exhibit similarities to the Application Exemption form:

IRS Form 1023: This federal application for tax-exempt status requires similar organizational details, including mission statement, governing documents, and budgetary information for nonprofit organizations. Just as with the Application Exemption, the IRS uses this form to evaluate eligibility for tax exemption.
IRS Form 1024: This form is utilized by organizations applying for tax-exempt status under sections not covered by Form 1023, such as social welfare organizations. The structure and required information mirror that found in the Application Exemption form, establishing the organization's purpose and activities.
California Form 199: This form serves as the California Exempt Organization Annual Information Return. Similarities exist in the need for detailed financial reporting and transparency about activities and governance, reflecting the organization’s compliance with state tax laws.
California FTB 3500A: This abbreviated application option is available for organizations that have previously been recognized as tax-exempt. Both forms aim to provide clarity about the organization's activities and ensure adherence to California tax regulations.
Form 501(c)(3) Application: This document, specifically for organizations seeking 501(c)(3) status, requires detailed narratives about activities and purposes. As with the Application Exemption form, this application includes financial data and governance structures.
Commercial Fundraising Registration: In many states, including California, nonprofits must register if they plan to raise funds commercially. Similar to the Application Exemption, this form demands disclosure of fundraising activities, locations, and governance.
Foreign Corporation Registration: Entities registering as foreign corporations in California must provide necessary information to confirm their legal standing. The required information parallels that of the Application Exemption as both documents necessitate details about organization structures and representatives.
California Nonprofit Corporation Application: This form is for organizations seeking initial nonprofit status in California. Like the Application Exemption, it collects detailed information about organizational structure, purpose, and representatives.
Annual Report for Nonprofits: Many states require annual reporting by nonprofits to maintain tax-exempt status. This report will include updates on operational activities and governance, similar to what is asked in the Application Exemption form.

When filling out the Application Exemption form, consider the following tips:

Double-check all the information for accuracy before submission.
Ensure you attach all required documentation as incomplete applications can be delayed or denied.
Review the specific eligibility criteria to confirm your organization qualifies for tax-exempt status.
Fill out every section of the form completely; leaving sections blank can lead to complications.
Seek assistance if unsure about any part of the form; clarity is crucial for successful approval.

Avoid making these mistakes:

Do not assume that electronic filing is always an option; verify submission methods.
Avoid using outdated forms; always check for the latest version of the Application Exemption form.
Don’t provide generic answers; be specific about your organization's activities and purpose.
Leave out acronyms or jargon that may not be well understood; clarity is key.
Do not forget to sign and date the form as an unsigned application may be rejected.

There are several misconceptions about the Application Exemption form, particularly regarding its purpose and requirements. It is essential to clarify these misunderstandings to ensure a smooth application process.

Misconception 1: The Application Exemption form is only necessary for new organizations.

This is not true. Any organization seeking tax-exempt status in California, regardless of when it was established, must complete this form if it has not already obtained such status from the state.

Misconception 2: Providing a verbal explanation of the organization’s activities is sufficient.

A detailed written description of activities is crucial. The form requires specifics about past and planned activities to assess whether the organization qualifies for tax exemption.

Misconception 3: All documents submitted with the Application Exemption form must be original copies.

Copies of supporting documents are accepted. This flexibility helps organizations submit the necessary paperwork without being hindered by the need for originals.

Misconception 4: The Application Exemption form can be submitted at any time without consequence.

Timing matters significantly. Delays in submitting the form may lead to a denial of the exemption, particularly if other required documents are missing.

Misconception 5: The form guarantees tax-exempt status once submitted.

Submitting the form does not automatically grant tax-exempt status. The application must be reviewed and approved by the appropriate authorities, which may take time.

1. Provide Accurate Information: Ensure all details on the Application Exemption form are accurate and reflective of your organization. Inaccuracies will delay your application or result in its denial.

2. Gather Required Documents: Include all necessary supporting documents. Copies are accepted, but make sure they are legible and organized.

3. Understand the Structure: Clearly identify your organization type—whether it's a corporation, trust, LLC, or other. This determination influences your eligibility and requirements for exemption.

4. Be Thorough in Descriptions: When explaining your activities, provide detailed descriptions. Include timelines, purposes, and any relevant metrics. This clarity will support your exemption request.

5. Check Previous Status: If applicable, confirm whether your organization has previously held tax-exempt status. This may affect your current application and eligibility.

Is the organization currently conducting, or plan to conduct activities?

□. .Yes. . . □. No

If “Yes,” enter the date the activities began, or will begin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . /.

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