Official Site of The State of New Jersey

Nonprofit Organizations

No single form or government agency establishes a nonprofit organization. Organizations may need to follow a number of steps and consult different federal and New Jersey agencies to comply with all the procedures and laws. Although many of these procedures do not involve the Division of Taxation, we offer some basic information and links for assistance.

Organizations Applying for Exempt Status

Organizations seeking an exemption from paying New Jersey Sales and Use Tax must complete all steps of the REG-1E application. There is no fee to file the REG-1E application, but you must provide all pertinent information and supporting documentation to ensure your exemption certificate request is not delayed or denied. (The Division also may require additional documentation.)

Organizations Seeking to Make a 501(h) Election

After approving a Sales and Use Tax exemption with a 501(h) election, New Jersey requires your organization to complete, sign and return an annual certification to maintain Exempt status. You must certify that your entity has not exceeded its threshold, is in compliance with federal guidelines and has not been revoked by the IRS for substantial activity over the federal expenditure test. The Division reserves the right to revoke an ST-5 if the entity exceeds the 501(h) election threshold or fails to return the annual certification. If your organization exceeds the threshold, your ST-5 may be revoked for one year and you will have to reapply.