Michigan Booster Club Filing Requirements

Forming a Nonprofit Corporation in Michigan

A booster club incorporates under the Michigan Nonprofit Corporation Act by filing nonprofit Articles of Incorporation (form 502) with the Corporations Division of the Department of Licensing and Regulatory Affairs (LARA), through the MiBusiness Registry Portal. The fee is $20 ($10 filing plus $10 franchise fee); 24-hour expedited handling adds $50. The articles must contain the purpose and dissolution language the IRS requires for 501(c)(3) status (federal tax exemption for charitable and educational organizations); see How to Incorporate a Booster Club.

Beginning the year after formation, the club files an annual report, online only, due October 1, fee $20. A corporation that stops filing is automatically dissolved after LARA mails notices to its resident agent (the person designated to receive official mail), and restoring it requires every missing report. A charity also cannot dissolve voluntarily without the Attorney General’s approval.

State Tax Exemption

Michigan’s corporate income tax does not apply to entities exempt from federal income tax. A club with its IRS determination letter (the letter confirming 501(c)(3) status) files no state exemption application.

Sales Tax

Purchases. There is no application. A 501(c)(3) gives the vendor a completed Certificate of Exemption (Form 3372) with a copy of its IRS letter. A school’s exemption does not cover its PTO or booster club. Two limits apply: property used for fundraising is exempt only if a single item costs $5,000 or less, and purchased raffle prizes owe use tax (raffle tickets themselves are not taxed; donated prizes owe nothing).

Sales. Retail sales by nonprofits are taxable at 6% except as Revenue Administrative Bulletin 2020-25 allows. The first $10,000 of sales in a calendar year is exempt only if total retail sales stay under $25,000. At $25,000 or more, every sale that year is taxable, whether or not tax was collected. The bulletin also says a club affiliated with a school is not a separate person for this exemption; how that applies to a separately incorporated club is unclear, so the club should ask Treasury in writing.

A selling nonprofit generally needs a sales tax license even when all sales are exempt, but a club with two or fewer sales events a year may report on Form 3421 (Special Events) or Form 5089 (Concessionaire’s) instead.

Charitable Solicitation Registration

The Charitable Organizations and Solicitations Act (MCL 400.271 et seq.) requires any organization that solicits or receives contributions in Michigan, including online, to register with the Attorney General’s Charitable Trust Section.

1. Exemption. Organizations that raise funds only through volunteers and receive under $25,000 a year are exempt; the club confirms this with the CTS-03 Request for Exemption.
2. Initial registration. Otherwise, the club files CTS-01 with its bylaws, IRS letter, and a recent financial accounting.
3. Renewal. Registration expires seven months after fiscal year end (July 31 for a calendar year; January 31 for a June 30 year end). The club files CTS-02 at least 30 days earlier; a shorter version exists for 990-N filers.
4. Fees. The AG’s page lists no registration fee. Confirm current financial statement and audit requirements with the agency.

Raffles and Gaming

Raffles are legal for a qualified nonprofit licensed by the Michigan Lottery’s Charitable Gaming Division.

1. Qualify. Booster clubs and PTOs do not fit the “educational” category, which covers schools and districts only. The Division lists booster clubs as “civic” organizations, which need a resolution from the local unit of government recognizing the club and a dissolution clause sending assets to that government or another nonprofit.
2. License each raffle. A small license (total prizes of $500 or less per day) costs $15 for up to three drawing dates plus $5 per added date. A large license costs $50 per drawing date. Processing takes 4 to 6 weeks.

Ticket sellers and buyers must be at least 18, so students cannot sell. A 50/50 needs a license. The one exception is a raffle at a single club meeting held mainly for another purpose, with all tickets sold and prizes awarded there and total prizes of $100 or less.

The club mails a financial statement by the 10th of the month after the drawing (an October 18 drawing reports by November 10). Division guidance does not address online ticket sales; see Online and Electronic Raffles. Millionaire parties (casino nights) are licensed separately by the Michigan Gaming Control Board.

Annual Compliance Calendar for Michigan