New California Reporting Requirements

New reporting requirements for small tax-exempt organizations take effect January 1, 2011 (California Revenue and Taxation Code Section 23772). Small tax-exempt organizations are those with normal gross receipts of $25,000 or less who under these new reporting requirements must electronically file FTB 199N, Annual Electronic Filing Requirement for Small Tax-Exempt Organizations (California e-Postcard), available January 2011. This new requirement applies to account periods beginning on or after January 1, 2010.

Exceptions

Churches and church-related organizations have no filing requirement.

Private foundations must file Form 199, Exempt Organization Annual Information Return.

Annually, these small tax-exempt organizations must include the following information in electronic form when they file the California e-Postcard. (The term organization and entity are interchangeable.)

Entity identification number or California corporation number

Legal name of the organization

Federal employer identification number

Account period beginning and ending (also known as your tax period or tax year)

If your entity’s account period changed

Entity’s mailing address

Any other names the entity uses (doing business as or DBA name)

Name and address of a principal officer

Website address, if applicable

Entity’s amount of total gross receipts (the gross receipts must be normally $25,000 or less)

If the entity terminated or went out of business

If the entity started business within the current year

Contact person’s name and telephone number

The due date is the same for state and federal purposes – by the 15th day of the-5th month after an organization’s tax year ends. Therefore, calendar year organizations must file by May 15.

We do not charge a fee to file the California e-Postcard. If the organization does not file on time, we will send a reminder notice, but will not assess a penalty for late filing. However, if an organization fails to file for three consecutive years, we automatically revoke its California tax-exempt status. If this occurs, the organization must reapply using form FTB 3500, Exemption Application, and get approval to regain its tax-exempt status. Any income received between the revocation date and renewed exemption date may be taxable.

We must publish and maintain a list of the organizations whose tax-exempt status is revoked. We plan to publish this list on our website in the near future.

For more information, go to ftb.ca.gov and search for exempt organizations, or call us at 800.852.5711, select Business Entities Information, and then select option 4 to speak to a representative.