New Mexico Booster Club Filing Requirements

Forming a Nonprofit Corporation in New Mexico

A booster club incorporates under the Nonprofit Corporation Act (NMSA 53-8) by filing Articles of Incorporation online with the Secretary of State’s Business Services Division. The fee is $25 (NMSA 53-8-85). The articles name a New Mexico registered agent and need IRS-required purpose and dissolution language for 501(c)(3) status (federal tax exemption for charitable and educational organizations). See How to Incorporate a Booster Club.

The first annual report is due within 30 days after incorporation. After that, the $10 report is due by the 15th day of the 5th month after the club’s taxable year ends (NMSA 53-8-83): May 15 for a calendar year, November 15 for a June 30 fiscal year. That matches the federal Form 990-N deadline, so the treasurer can file both the same week.

State Tax Exemption

Federal 501(c)(3) status carries over automatically for New Mexico corporate income and franchise tax. A 501(c)(3) files Form CIT-1 only when it has unrelated business income.

Sales Tax

New Mexico’s gross receiptsGross receiptsThe total amounts the club receives from all sources during its fiscal year, without subtracting any costs or expenses. Gross receipts decide which Form 990 the club files.All terms tax (GRT) is imposed on the seller, who passes it along in the price. TRD publications FYI-103 and QG-004 set these rules for a 501(c)(3):

Purchases. Only purchases of tangible personal property for exempt functions escape passed-on GRT, and only when the club gives the vendor a Type 9 Nontaxable Transaction Certificate (NTTC). To issue NTTCs, the club registers with TRD on Form ACD-31015, attaching its IRS determination letter. Services, rentals, hotel rooms, and banquet halls remain taxable.

Sales. Under NMSA 7-9-29, a 501(c)(3)’s receipts are exempt from GRT except receipts from an unrelated trade or business as defined federally. Volunteer-run fundraisers are generally not an unrelated business (see Unrelated Business Income Tax), so most booster fundraiser receipts are exempt. Raffle receipts fall under a separate tax instead of GRT.

Charitable Solicitation Registration

The Charitable Solicitations Act (NMSA 57-22) requires charities operating or soliciting in New Mexico to register with the Attorney General’s office (now the New Mexico Department of Justice) and file an annual report within six months after the fiscal yearFiscal yearThe club’s 12-month accounting year, set in the bylaws. Many booster clubs use July 1 through June 30 to match the school year, and the club’s filing deadlines count from the day it ends.All terms ends. A Form 990 or 990-EZ filer submits a copy; a 990-NForm 990-NThe e-Postcard: the annual electronic notice a tax-exempt club files with the IRS when its gross receipts are normally $50,000 or less. It is due the 15th day of the 5th month after the fiscal year ends.All terms filer submits an alternate report under oath. Total expenses over $750,000 require an audit by an independent certified public accountant (CPA). The statute sets a $100 late fee and has no small-organization dollar exemption.

NMSA 57-22-4(B), however, exempts from registration and reporting “educational institutions and organizations defined in Section 6-5A-1.” That section covers a 501(c) organization whose principal purpose is supporting a single “agency,” which expressly includes a public school district. A booster club supporting one district’s program appears to fit, and takes on these duties:

1. Before the district accepts the club’s funds or property, the two sign a written agreement covering purpose, financial reporting, and district review of the bylaws.
2. A club with $750,000 or less in annual expenditures files a balance sheet statement with the district.
3. A club above $750,000 is audited annually under governmental auditing standards.

A club unsure whether it qualifies should confirm with the Department of Justice before relying on the exemption.

Raffles and Gaming

Raffles are legal for qualified organizations under the Bingo and Raffle Act (NMSA 60-2F), administered by the Gaming Control Board. A “qualified organization” is a bona fide charitable or educational nonprofit that has existed in New Mexico continuously for two years before conducting a raffle or applying for a license. A new booster club cannot hold a raffle until its second anniversary; the board has warned that unqualified raffles carry misdemeanor penalties.

Key rules:

• Exempt raffles. A qualified organization holding no more than one raffle (or bingo occasion) in any three consecutive calendar months, and no more than four in a calendar year, is exempt from the Act’s licensing (NMSA 60-2F-26).
• Licensed raffles. More frequent raffles require a Gaming Control Board license, with fingerprinting. Confirm current fee with the agency.
• Large prizes. A raffle with an individual prize over $75,000 requires ten days’ prior notice to the board and a report of winners afterward.
• Raffle tax. Licensed games pay a bingo and raffle tax of one-half percent of gross receiptsGross receiptsThe total amounts the club receives from all sources during its fiscal year, without subtracting any costs or expenses. Gross receipts decide which Form 990 the club files.All terms, filed quarterly with TRD (Form RPD-41345).

The Act does not address online ticket sales directly; confirm with the Gaming Control Board before selling online.

Annual Compliance Calendar for New Mexico