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Tax Exemption Laws

What is a tax exemption?

There are several tax systems that grant tax exemptions to certain organizations, people, income, property or any other items that are taxable under the systems. Tax exemption also refers to any personal allowance or monetary exemption which is claimed by a person to reduce his/her taxable income according to certain systems. When a person files a tax exempt status then this may provide a taxpayer complete relief from tax, tax at a reduced rate, or tax that is only applied to certain portions of items that are taxable.

May a private non-profit organization get tax "exempt" license plates for its vehicles (cars and trucks) in California?

In the state of California, there is no vehicle Code Provision for a tax exempt license. There are certain tax exempt portions relating to the registration of the vehicle. A person may be able to find out more information here; http://www.leginfo.ca.gov/cgi-bin/displaycode?section=rtc&group=10001-11000&file=10781-10789.

In the state of Texas, if the company sells stock with a securities exemption and forget to file form “D”, can the company later file the form or claim a exemption that the company qualifies for that don’t require form “D”?

If it is mandatory, then there may be a penalty for filing the form late, but if the form is not mandatory, and the person can file for other exemptions, the person may be okay to file another one. In the state of Texas, the person should find an authority figure that deals with state taxes and find out of it is mandatory to file form “D”.

In the state of Minnesota, if a non-profit is awaiting a decision on tax exemption status, what would they tell their donators in regards to donations being a tax write off?

The non-profit should write a letter with something along the lines of “As of today, the donation is just tax deductible per state of Minnesota law and has not yet be approved for Federal law. We will inform you as soon as it is approved on the Federal level. Sorry for the inconvenience and thank you for your understanding.”

In the state of Maryland, would a person need to close his/her c-corporation to open a new one to get a tax exempt status and would it be beneficial for the person to obtain a lawyer to do such?

The Secretary of State’s office will have a guide that will help the corporation to file for a tax exempt status. This guide will include detailed guidelines which the person will need to amend their articles of incorporation to show their tax exempt status. The person will also need to register with the Secretary of State’s Office as a charitable organization. The company can maintain their current company status. The company would have to be a association, trust, or corporation. There is no reason why the person should close his/her company unless he/she has some liabilities or other issues that warrant the person to close the corporation. Having an attorney to help with this process or to seek advice is not a bad idea if the corporation would like to protect themselves and be able to file correctly.

When having an exempt status for a company it helps to understand the ins and outs of this. Exempt status in regards to taxes helps companies to keep serving their cause while catching a break and saving money at the end of the year. Questions may arise in regards to the tax exempt status or how to file, that the person may need to seek the help and advice of an Expert to clarify any questions or concerns that he/she may have.
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