Arizona Booster Club Filing Requirements

Forming a Nonprofit Corporation in Arizona

The Arizona Corporation Commission (ACC) files nonprofit corporations under Title 10 of the Arizona Revised Statutes (A.R.S.).

1. Complete Form C011, Articles of Incorporation, Nonprofit, adding the IRS-required purpose and dissolution language (the ACC form meets only Arizona’s minimum).
2. List the initial directors and incorporators. Every incorporator signs.
3. Appoint a statutory agent (a person or business with a physical Arizona address that accepts legal papers for the club). Lacking one at any time can lead to administrative dissolution.
4. File the Certificate of Disclosure (Form C003) with the articles.
5. Pay $40, or $75 with expedited processing.
6. Publish the articles if required. Under A.R.S. 10-3203, within 60 days after the ACC approves the filing, either the articles are published in a newspaper (with an affidavit of publication filed), or the ACC posts the filing in its database. The ACC posts it when the club’s known place of business is in a county with more than 800,000 people, which today means Maricopa and Pima counties. Clubs elsewhere publish after receiving the approval letter, which explains how.

Annual report

Each nonprofit corporationNonprofit corporationA legal entity created by filing articles of incorporation with the state, separate from the parents who run it. It can open a bank account, sign contracts, and apply for 501(c)(3) status.All terms files an annual report with the ACC for $10 ($45 expedited) on the due date assigned to it, shown on the club’s record in the Arizona Business Center. After a missed deadline the ACC sends delinquency notices; about 120 days after the first notice, the corporation is administratively dissolved. Reinstatement costs $100.

State Tax Exemption

Arizona exemption is automatic. A.R.S. 43-1201(A)(1) exempts “organizations that are exempt from federal income tax under section 501 of the internal revenue code.” There is no state application or fee.

Arizona’s information return for exempt organizations (A.R.S. 43-1242) applies only to organizations exempt under subsection B of 43-1201 (nonprofit medical marijuana dispensaries). A booster club files no Arizona return unless it has unrelated business income (income from a regular business unrelated to its purpose), which A.R.S. 43-1231 taxes.

Sales Tax

Arizona levies a transaction privilege tax (TPT), a tax on the seller’s privilege of doing business, rather than a classic sales tax. Cities levy their own TPT on top of the state rate.

Purchases

Arizona has no general TPT exemption for nonprofit purchases. The statutory exemptions for purchases by 501(c)(3) organizations are narrow (for example, programs for persons with disabilities). A booster club pays tax on supplies, uniforms, and equipment.

Fundraiser sales

Two state exemptions can apply:

• Retail sales. A.R.S. 42-5061(A)(4) exempts sales of tangible personal property by a nonprofit “organized and operated exclusively for charitable purposes” and recognized under 501(c)(3).
• Food and drink. A.R.S. 42-5074(B) exempts the same charitable 501(c)(3) organizations from the restaurant classification, and separately exempts nonprofits that “do not regularly engage or continue in the restaurant business for the purpose of fund-raising.”

Whether a club is “exclusively charitable,” and whether a season-long concession stand is “regularly” in the restaurant business, are questions for the Department of Revenue, and city TPT may differ. Before a large merchandise or concession program, the treasurer asks the Department whether the club needs a TPT license.

Charitable Solicitation Registration

Arizona has no charitable solicitation registrationCharitable solicitation registrationRegistration with a state office, usually the attorney general or secretary of state, before asking the public for donations, typically renewed each year with a financial report. Whether it is required, and the thresholds and fees, vary by state.All terms. Chapter 19 of Title 44 now contains only definitions and a list of unlawful practices. A.R.S. 44-6561 prohibits misrepresenting that a donation is tax-deductible or going to a nonprofit, using a confusingly similar name, and similar deception, with civil penalties up to $1,000 per violation. Online fundraising by an Arizona club triggers no state filing, though other states where donors live may have their own rules.

Public school tax credit

Arizona taxpayers may claim a credit of up to $200 (single) or $400 (married filing jointly) for fees and contributions paid to a public school for extracurricular activities such as band uniforms (A.R.S. 43-1089.01). The credit applies to payments to the school, not to a booster club, so booster gifts are never described as credit-eligible.

Raffles and Gaming

Raffles are legal for Arizona nonprofits without a permit under A.R.S. 13-3302(B). An organization exempt under Section 501 of the Internal Revenue Code may conduct a raffle if:

1. It keeps its exempt status, and no member, director, officer, employee, or agent receives any direct or indirect financial benefit beyond participating on equal terms.
2. It has existed continuously in Arizona for one year immediately before the raffle.
3. Only bona fide local members of the club take part in managing, selling, or operating the raffle.

A 50/50 drawing is a raffle and follows the same conditions. The statute does not address online ticket sales, and outside companies may not operate the raffle (except for certain hospitals and child-abuse organizations), so a club wanting online sales confirms the approach with counsel first. Bingo requires an annual license under A.R.S. Title 5, Chapter 4.

Annual Compliance Calendar for Arizona