Maryland Nonprofit, Charity, and Legal Entity Setup

In Maryland, the first step to starting a nonprofit is determining what type of organization you’ll create. There are three types recognized in the state:

• Religious Corporation
• Tax-Exempt Nonstock Corporation
• Nonstock Corporation

Below are the basic steps to starting a nonprofit. For more detailed information, see Maryland Association of Nonprofit Organizations, Inc.

Maryland Nonprofit and Charity Overview

• Incorporate with the Maryland State Department of Assessments & Taxation (SDAT)
• Apply for tax-exempt status with the IRS
• Register for Charitable Solicitation with the Maryland Secretary of State.
• Apply for Sales and Use Tax, and State Income Tax exemptions from the Comptroller of the Treasury

Items Needed During This Process

• Registered Agent
• Articles of Incorporation
• Board Members
• Bylaws

Maryland State Department of Assessments & Taxation (SDAT)

Nonprofit organizations must register as a corporation first. In Maryland, it's required by law to conduct an organizational board meeting, elect a slate of officers, and accept the articles of incorporation.

Requirements:

• Articles of incorporation for a tax-exempt nonstock corporation
  • You can also find a sample here
  • The Board of Directors must consist of at least three members, but the state recomends five to seven unrelated individuals.
  • You can search for business names here
• Payment of processing fees. Checks must be made out to the State Department of Assessments and Taxation.
  • Regular processing (4 to 6 weeks) - $100 fee + $20 Organization & Capitalization Fee
  • Expedited processing - $50 for each document; other fees may apply

Mail documents and fees to:
State Department of Assessments and Taxation, Charter Division
301 W. Preston Street; 8th Floor
Baltimore, MD 21201-2395

You can also file online at the Maryland Business Express website. Take note that online filings are considered expedited; they will follow the expedited processing fee.

Maryland Secretary of State

You are required to register as a charitable organization and solicit charitable contributions with the Maryland Secretary of State.

If your nonprofit receives less than $25,000 per year in charitable contributions, you may instead file an Exempt Organization Fund-Raising Notice form.

Requirements:

• Charitable Solicitation Form (COR-92)
• Articles of incorporation and/or other governing instruments (bylaws/charter)
  • Here’s a sample template for bylaws
• Copy of the IRS determination letter
• Signed copy of IRS Form 990, 990-EZ or 990-PF
• Financial statements
  • Financial review by an independent certified public accountant if your level of charitable contributions ranges from $300,000 to $750,000.
  • Audit by an independent public accountant if your level of charitable contributions is at least $750,000.
• List of board directors with their names and addresses
• Copy of all contracts with professional solicitors or fund-raising counsel and subcontracts
• Check or money order made payable to the Secretary of State (registration fee). The fee depends on the level of charitable contributions received.
  • Less than $25,000 - $0
  • $25,000 to $50,000 - $50
  • $50,001 to $75,000 - $75
  • $75,001 to $100,001 - $100
  • $100,001 to $500,001 - $200
  • $500,001 and above - $300

Mail documents and fees to:
Charitable Organization Division
Office of the Secretary of State
16 Francis Street
Annapolis, MD 21401

When emailing the form, email it to: dlcharity_sos@maryland.gov. Note there is no online payment option; you must mail the payment.

Maryland Comptroller of the Treasury

After applying for tax-exempt status with the IRS, you can also apply for sales and use tax, and state income tax exemption with the state Comptroller.

After applying for tax-exempt status with the IRS, you may also apply for sales and use tax, and state income tax exemption with the state Comptroller.

Requirements:

• Sales and Use Tax Exemption Certificate (SUTEC)
  • Use when filing for the first time and operating out of a physical business location in Maryland, Delaware, Pennsylvania, Virginia, Washington DC, or West Virginia.
• IRS determination letter
• Articles of incorporation
• Bylaws, Constitution, or other governing documents
• Letter of good standing issued by the Maryland Department of Assessments and Taxation (SDAT) if physically located in Maryland.

Mail documents to:
ATTN: Central Registration - SUTEC
Comptroller of Maryland
Revenue Administration Division
110 Carroll Street
Annapolis, MD 21411-0001

Next, apply for state income tax exemption from the Comptroller. Below are the requirements:

• Letter of request for exemption from Maryland income tax
• Explanation of the nature, purpose, and scope of your organization
• IRS determination letter
• Bylaws
• Your organization's latest financial statement

Mail documents to:
Comptroller of the Treasury
Revenue Administration Division
Attention: Legal Department
110 Carroll Street
Annapolis, MD 21411
1.800.MD.TAXES (638.2937) and 410.260.7980

Additional Registrations

You may also apply for state and local property taxes exemption with the State Department of Assessments.

For charitable property, fill out the form here.