North Carolina Booster Club Filing Requirements

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.

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 agentRegistered agentThe person or company designated to receive lawsuits and official state notices for the corporation at a street address in the state. Some states call it a resident agent or statutory agent.All terms 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:

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