# North Carolina Booster Club Filing Requirements

> North Carolina booster club rules: $60 nonprofit articles, no annual report, E-585 sales tax refunds, school fundraiser exemptions, and five raffles a year.

- URL: https://boosterclub.org/states/north-carolina/
- Section: States
- Updated: 2026-10-08

North Carolina is light on corporate paperwork: no annual report, and 501(c)(3) status carries over for income tax. Booster clubs do not get a sales tax exemption on purchases, but most can claim a refund twice a year, and the Department of Revenue names "Band Boosters" as an example of a school group whose fundraiser sales are exempt. Raffles need no permit but are capped at five per year.

## At a Glance

| Requirement | Agency | Form | Fee | Frequency |
|---|---|---|---|---|
| Incorporate as nonprofit | Secretary of State, Business Registration | Articles of Incorporation, N-01 | $60 | once |
| Annual report | None for nonprofit corporations | None | $0 | none |
| State income/franchise tax exemption | Department of Revenue (NCDOR) | None; optional exemption letter | $0 | automatic |
| Sales tax on purchases | NCDOR | Refund claim, E-585 | $0 | semiannual |
| Sales tax on fundraiser sales | NCDOR | None if exempt; otherwise register | n/a | n/a |
| Charitable solicitation registration | Secretary of State, Charitable Solicitation Licensing | License application or 131F-3(3) exemption request | $0 to $200 | annual |
| Raffle permit/registration | None (G.S. 14-309.15) | None | $0 | n/a |

## Forming a Nonprofit Corporation in North Carolina

A booster club incorporates by filing Articles of Incorporation for Nonprofit (Form N-01) with the Secretary of State's Business Registration Division. The fee is $60, and the form can be filed online. The articles name a registered agent with a North Carolina address 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](https://boosterclub.org/start/incorporate/).

North Carolina does not require nonprofit corporations to file an annual report; the Secretary of State's nonprofit forms list includes none. The club still keeps its registered agent current, because legal notices are served there.

## State Tax Exemption

No application is required. The Department of Revenue states that North Carolina follows the Internal Revenue Code, so an organization exempt for federal income tax purposes qualifies for exemption from state corporate income and franchise tax. A club wanting written confirmation can request an exemption letter from NCDOR's Nonprofit Corporate Tax section. A return (Form CD-405) is required only when the club has unrelated business income.

## Sales Tax

**Purchases.** North Carolina does not exempt nonprofits from sales tax on purchases, and a nonprofit may not use a Certificate of Exemption for items it uses itself. Instead, a 501(c)(3) can claim a **semiannual refund** of state and local sales tax paid on purchases used in its nonprofit work (G.S. 105-164.14(b)). Organizations classified in three National Taxonomy of Exempt Entities (NTEE) groups are excluded: Community Improvement and Capacity Building, Public and Societal Benefit, and Mutual and Membership Benefit. Booster clubs are usually classified under education or sports, so most qualify; the treasurer confirms the NTEE code on the IRS record.

The refund is claimed on Form E-585: by October 15 for January through June purchases, and by April 15 for July through December. Purchases by a volunteer the club has designated in its records, then reimbursed, count as club purchases. Invoices showing tax paid are required, and claims more than three years late are barred.

**Sales.** Nonprofits making retail sales must register and collect tax unless a statute exempts the sale. NCDOR's Sales and Use Tax Bulletins (SUTB 60 and 62) list exemptions that cover most booster fundraising:

1. **School clubs and groups.** Sales at fundraising events by groups "such as the Senior Class, Band Boosters" are exempt when the net proceeds are given or contributed to the school.
2. **School-sponsored events.** Food, drinks, candy, and other items sold not for profit at an event sponsored by an elementary or secondary school are exempt when net proceeds go to the school or to a nonprofit acting as a conduit to the school. A concession stand run continuously on school premises qualifies on the same condition.
3. **Annual sales.** An educational or charitable nonprofit's once-a-year product sale is exempt if goods are delivered within 60 days of the first solicitation and the other conditions in SUTB 62-1 are met.
4. **Admissions.** Admission to an event sponsored solely by an income-tax-exempt nonprofit is exempt if all proceeds go to its purposes and no one is paid to participate or produce it. Admission to a school-sponsored event is exempt.

Order-taking for a fundraising company in exchange for a commission is taxable.

## Charitable Solicitation Registration

The Secretary of State's Charitable Solicitation Licensing Division licenses charities that solicit in North Carolina (G.S. Chapter 131F). A club is **exempt** if it receives less than $50,000 in contributions in a calendar year and compensates no officer, trustee, fundraiser, or solicitor (G.S. 131F-3(3)). To document the exemption, the club files the 131F-3(3) Exemption Request Form; since September 14, 2023, a Form 990-N confirmation is accepted as proof of financial history.

"Contribution" is defined narrowly: it excludes bona fide membership dues and, for goods sold, counts only the amount paid above fair market value. A club that pays a compensated fundraiser, or that receives $50,000 or more in contributions, must hold a license:

| Contributions in prior fiscal year | License fee |
|---|---|
| Under $5,000 (license required only if compensating) | $0 |
| $5,000 to under $100,000 | $50 |
| $100,000 to under $200,000 | $100 |
| $200,000 or more | $200 |

The license is renewed annually with financial information (Form 990 or 990-EZ, an audit, or the state's Annual Financial Report form). Late renewals cost $25 per month.

## Raffles and Gaming

Raffles are legal for nonprofit organizations without a permit under G.S. 14-309.15, but the statute sets firm limits:

- No more than **five raffles per year**.
- Maximum cash prize of $125,000 per raffle; all prizes together may not exceed $250,000 in fair market value in a calendar year.
- At least 90 percent of net proceeds (receipts minus the cost of prizes) must be used for charitable, educational, civic, or other nonprofit purposes.
- Raffles may not be conducted in conjunction with bingo.

A 50/50 drawing is a raffle, so each one counts toward the five-per-year limit. The statute does not address online ticket sales; confirm with counsel before selling online. Bingo is separately licensed.

## Annual Compliance Calendar for North Carolina

| Filing | Due date | Agency |
|---|---|---|
| E-585 refund (January to June purchases) | October 15 | NCDOR |
| E-585 refund (July to December purchases) | April 15 | NCDOR |
| Form 990-N (federal) | 15th day of 5th month after year end: May 15 (calendar year), November 15 (June 30 year) | IRS |
| Charitable solicitation license renewal (if licensed) | Annually, per license | Secretary of State |
| Raffle count | Before scheduling each raffle (five per year) | Club records |
| Annual report | Not required | Secretary of State |

## Common Mistakes in North Carolina

- **Never claiming the E-585 refund.** Unclaimed refunds are barred after three years.
- **Running a 50/50 at every home game.** Each drawing is a raffle, and the sixth breaks the law.
- **Ignoring the $50,000 line.** Above it, a license is required.

## Checklist

### Forming

- [ ] File Form N-01 with the Secretary of State ($60), with IRS purpose and dissolution language
- [ ] Obtain an EIN (Employer Identification Number) and apply for federal 501(c)(3) status
- [ ] Confirm the club's NTEE code and request refund eligibility from NCDOR
- [ ] Designate in the minutes which volunteers may make purchases for the club
- [ ] File the 131F-3(3) exemption request or apply for a solicitation license

### Every Year

- [ ] File Form E-585 by October 15 and April 15 (treasurer)
- [ ] File Form 990-N or the applicable Form 990 (by the 15th day of the 5th month after year end)
- [ ] Renew the solicitation license or exemption as required
- [ ] Keep a raffle log and stop at five raffles per year
- [ ] Confirm fundraiser proceeds go to the school when relying on the school-group exemption

## Related Pages

- [Filing Requirements by State](https://boosterclub.org/states/) compare other states
- [Sales Tax for Booster Clubs](https://boosterclub.org/taxes/sales-tax/) purchases and fundraiser sales
- [50/50 Raffles](https://boosterclub.org/raffles/50-50-raffles/) cash split games
- [Form 990-N](https://boosterclub.org/taxes/form-990-n/) the federal annual filing

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*This page is general information for volunteer-run booster clubs. It is not legal,
tax, or accounting advice, and BoosterClub.org is not a law firm, accounting firm, or
government agency. Rules change and vary by state and district. Confirm current
requirements with the IRS, the relevant state agency, the school district, and a
qualified professional before acting. If a fact on this page is out of date, we want
to know.*

## Sources

1. North Carolina Secretary of State: https://www.sosnc.gov/forms/by_title/_Business_Registration
2. North Carolina Department of Revenue: https://www.ncdor.gov/taxes-forms/corporate-income-franchise-tax/nonprofit-corporate-tax-information
3. North Carolina Department of Revenue: https://www.ncdor.gov/taxes-forms/sales-and-use-tax/sales-and-use-tax-technical-references/sales-and-use-tax-bulletins
4. North Carolina Department of Revenue: https://www.ncdor.gov/sutb-2026pdf/open
5. North Carolina Secretary of State: https://www.sosnc.gov/divisions/charities
6. North Carolina Secretary of State: https://www.sosnc.gov/forms/by_title/_Charities
7. North Carolina Secretary of State: https://www.sosnc.gov/webfiles/documents/forms/charities/charities_sponsors/initial_renewal_license_Application_instructions.pdf
8. North Carolina Secretary of State: https://www.sosnc.gov/webfiles/documents/forms/charities/charities_sponsors/request_for_exemption_under_131f_3_3.pdf
9. North Carolina General Assembly: https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_131F/GS_131F-3.html
10. North Carolina General Assembly: https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_131F/GS_131F-8.html
11. North Carolina General Assembly: https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_14/GS_14-309.15.html
12. IRS: https://www.irs.gov/charities-non-profits/annual-electronic-filing-requirement-for-small-exempt-organizations-form-990-n-e-postcard