Tax Exemptions

There are multiple levels of tax exemptions for nonprofit organizations, and each must be filed separately at the federal, state, and county level.

Income Tax Exemptions
Income tax exemptions are handled at the federal level, and tax exempt status is granted by the IRS. Once an organization has obtained tax-exempt status, they must adhere to the guidelines of tax-exempt organizations and file annual reports with the IRS to maintain it. In Oklahoma, organizations with federal tax-exempt status are also exempt from income tax at the state level.

Sales Tax Exemptions
Sales tax exemptions may be available for a nonprofit organization. Filing for a sales tax exemption is a separate process from income tax exemption. Different states and cities may have different filing procedures and guidelines for maintaining the organization’s sales tax exemption.

Ad Valorum Tax Exemptions
Ad valorum taxes are assessed on the value of real estate or personal property, so any nonprofit organization that owns real estate or other applicable personal property will need to apply for an ad valorum tax exemption with their county. When renting, the nonprofit organization can request an exemption on the portion of the rental space provided in its lease.

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