Texas Nonprofit Compliance: Formation, Corporate Reporting, Taxes, Fundraising, Employment, Advocacy, and Closure

Direct answer: what Texas actually asks of a nonprofit

The state law entity is a nonprofit corporation governed principally by Chapter 22 of the Business Organizations Code, and the statutory short title is the Texas Nonprofit Corporation Law. Creating that corporation is one act. Obtaining federal section 501(c)(3) recognition from the Internal Revenue Service is a second act entirely. Neither one performs the other, and neither one grants a Comptroller franchise or sales tax exemption, a property tax exemption, or any authority to conduct a regulated solicitation.

That separation is the single most useful thing to carry through the rest of this guide, because Texas repeats it at every stage. The report the Secretary of State may request is not the report the Comptroller wants. Exemption from franchise tax is not the threshold that decides whether a taxable entity owes it. The exemption on what an organization buys says nothing about the tax on what it sells. A charitable raffle is not a bingo game, and neither one authorizes serving alcohol. Ending the corporation is not ending the accounts.

Texas is also unusual in what it does not ask for. There is no yearly nonprofit corporate report. There is no general statewide charity registration for most ordinary charities. There is no universal statewide general business license. Each of those absences is narrower than it first sounds, and each is explained below rather than left as a slogan.

What follows covers 63 of the 88 requirements catalogued in the full Texas state guide, in the order an organization normally meets them. Every requirement in this article is SOURCE VERIFIED against a current official Texas source. Six requirements in the full guide remain VERIFICATION IN PROGRESS and none of them appears here: they concern the initial report question, formation publication, a statewide charity audit threshold, online raffle transaction methods, the bingo temporary occasion quota, and the current bingo fee schedule.

Forming the corporation: $25, three directors, and two officers who are not the same person

Formation is Form 202, the Certificate of Formation for a nonprofit corporation, filed with the Secretary of State for $25. Credit card payments carry the convenience charge the filing system discloses. The certificate has to supply the statutory information: the name, the registered agent and registered office, the management structure, the mailing address, organizer information, and the member or nonmember statement the form requires. The Secretary of State's template is minimum statutory language, so an organization seeking federal exemption usually needs supplemental provisions the template does not contain.

A registered agent and a physical Texas registered office are maintained continuously, not just at formation. The agent has to consent to serve, and the nonprofit cannot serve as its own registered agent. Filing the agent's written consent on Form 401-A is optional and costs $5 for a nonprofit; the consent may otherwise be retained internally.

Governance starts with a structural choice. Texas permits nonprofit corporations with or without members, and the certificate has to state which. Ordinarily the corporation is managed by a board of directors, but a certificate may validly vest management solely in the members instead. That is a distinct statutory structure with its own management rules, and it has to be stated expressly rather than assumed.

For the ordinary board managed corporation, the minimum is three directors and they must be natural persons. Governing documents may require more. Officers must include a president and a secretary, and although one person may hold multiple offices, the same individual generally may not serve as both president and secretary. A statutory church exception applies to that restriction.

Bylaws are adopted through the authorized board or member process and kept consistent with the certificate and Chapter 22. They are internal governance records rather than a routine Secretary of State filing, which surprises founders who expect to file them somewhere.

Corporate reporting: Form 802 arrives on request, not on a calendar

This is where Texas differs most sharply from the states around it. Texas nonprofit corporations do not file a yearly corporate report. The Secretary of State may request the periodic report on Form 802, and the statute limits how often that request can come: no more often than once every four years. When it arrives, the report costs $5 and reports the current directors, officers, registered agent and related information.

Because the trigger is a notice rather than a date, the consequences follow the notice too. Failure to file within 30 days after the first notice causes forfeiture of the right to conduct affairs. A later statutory notice opens a 120 day cure process before termination or revocation. Late charges accrue at $1 per month or part, with a $5 minimum and a $25 maximum, and reinstatement after termination adds a $25 fee. Those numbers are small; the loss of corporate standing in between is not.

Form 802 is also not the Comptroller's franchise report, not the Public Information Report or Ownership Information Report, not federal Form 990, and not any charity filing. Each of those lives in its own system with its own timing. The one internal obligation that sounds similar is genuinely internal: Chapter 22 requires the board to prepare or approve an annual financial report covering the corporation's financial condition and results, alongside the records the chapter requires and the separate member and public inspection rights. That report is kept, not filed.

Amendments and restatements are their own filings when the certificate actually changes. A nonprofit certificate amendment on Form 424 is $25.

A nonprofit incorporated elsewhere that transacts business in Texas registers on Form 302 for $25 before doing so, appoints a Texas registered agent, and can face statutory late fees for delayed registration. Withdrawing later uses Form 608 for $5, and that withdrawal closes the corporate registration only.

Tax: four questions Texas decides independently

Franchise tax comes first. A Texas nonprofit corporation is not automatically exempt from franchise tax because it incorporated as a nonprofit. A federally exempt organization applies through the Comptroller's federal exemption route, commonly on AP-204 with the required federal evidence, and no application fee is identified by the current process. While that application is pending, ordinary franchise obligations continue: the exemption request does not suspend anything.

The report year 2026 no tax due threshold is a separate rule that belongs to the taxable entity regime. For 2026 it is total revenue at or below $2,650,000, and it decides whether a still taxable entity owes franchise tax. It is not exemption, and an entity at or below it still carries the information reporting that remains. Franchise reports are generally due May 15, a late required report can draw a $50 penalty even with no tax due, and when tax is owed the payment penalty is 5 percent for 1 to 30 days late and 10 percent after more than 30 days, with statutory interest.

Once the Comptroller grants exemption, the posture changes: the organization does not file routine franchise reports or the Public Information and Ownership Information Reports while the exemption remains valid. Filing federal Form 990-T, or having unrelated business income, does not by itself create a separate Texas franchise report for an otherwise exempt organization.

Sales tax splits into two independent questions. On the buying side, federal section 501(c)(3) status alone does not authorize tax free Texas purchases: the organization obtains the applicable Comptroller exemption and then uses the certificate process, Form 01-339, for qualifying purchases made by the organization for its exempt purposes. Employees and volunteers cannot use the organization's exemption for personal purchases, reimbursement notwithstanding. On the selling side, a nonprofit making taxable sales generally needs a sales tax permit, which the Comptroller states carries no fee, and must collect, report and remit. Assigned returns are filed even for a zero sales period while the permit is active.

Two narrower selling rules matter often. A qualifying exempt organization may hold two one day tax free sales or auctions per calendar year, where an event may run up to 24 hours or up to 48 consecutive hours treated as two one day events, and an item priced over $5,000 generally does not qualify unless the organization manufactured it or it meets the statutory donated condition. Separately, a remote seller with less than $500,000 in total Texas revenue over the preceding twelve calendar months may use the small seller safe harbor, and once that is exceeded collection begins no later than the first day of the fourth month after the threshold is crossed.

Property tax is the fourth question and it is decided locally. Federal status does not exempt Texas property. The owner and the property have to satisfy the organizational and charitable use requirements of Tax Code section 11.18, and the county appraisal district decides. The application is Form 50-115, filed with the chief appraiser generally between January 1 and April 30, with statutory late application relief available no later than December 31 of the fifth year after the year the taxes were imposed.

Section 11.184 is a different route for organizations primarily engaged in charitable activities, and it is genuinely two steps. The organization first applies to the Comptroller on AP-199 for a determination, generally valid for five years. That determination is not the exemption. The organization then files Form 50-299 with the appraisal district, and the local chief appraiser decides whether the particular property qualifies.

Charity regulation: a narrow baseline and three separate solicitation systems

The Office of the Attorney General states that most charities and nonprofit organizations are not required to register with the state. That is a real and useful baseline, and it is also the most misread sentence in Texas nonprofit practice. It does not mean Texas does not regulate charities.

Charitable trust oversight runs independently. Texas charitable trust law gives the Attorney General enforcement and oversight authority over charitable interests whether or not any registration was filed, so governance decisions, asset transactions, court proceedings and closure can each implicate the office on their own. Private foundations have a filing of their own: Attorney General guidance requires a copy of Form 990-PF, and Form 4720 where applicable, on the same timetable as the federal filing, including extensions. That rule does not extend to ordinary charities filing Forms 990, 990-EZ or 990-T.

Three special solicitation systems then sit outside the baseline entirely, and they are not variations of one another. Law enforcement telephone solicitation runs through the Attorney General under the Law Enforcement Telephone Solicitation Act: the organization registration fee is $50, a commercial telephone solicitor must satisfy the separate $50,000 bond requirement, and registration expires on the 15th day of the fifth month after the organization's fiscal year end, which is when renewal is due.

Public safety solicitation runs through the Secretary of State under Occupations Code Chapter 1803. A covered organization, promoter or publication registers for $250, valid one year. A covered solicitor registers separately for $500 and maintains a $10,000 bond.

Veterans solicitation is a third system, also at the Secretary of State, under Chapter 1804. The organization registers for $150, valid one year, and its bond depends on its charter and its footprint: $1,000 for a congressionally chartered organization, otherwise $5,000 for not more than one county, $10,000 for more than one but fewer than six, and $25,000 for more than five. A solicitor registers separately for $500 with the same county based bond scale. Two reports follow: the organization files the annual report by January 15 for $50 when calendar year receipts exceeded $500, and the solicitor files a quarterly report for $50 at the end of any calendar quarter in which receipts exceeded $5,000.

Raffles and bingo: two systems, two regulators, no shared authority

The Charitable Raffle Enabling Act lets a qualifying organization hold raffles without any state raffle permit, which is why no permit fee appears anywhere in this section. The limit is four raffles per calendar year, and eligibility has to exist before the raffle rather than being cured afterward.

The operating rules are specific and unforgiving. Tickets carry the statutory disclosures. Cash prizes are prohibited. Before tickets go on sale the organization must own or possess the prize, or post the required bond through the county clerk. A purchased prize is subject to the $75,000 value limit, except for the statute's separate $250,000 residential dwelling limit. Rescheduling and proceeds rules apply on their own terms.

Bingo is a different statute, a different regulator and a different set of duties. Charitable bingo regulation transferred to the Texas Department of Licensing and Regulation effective September 1, 2025, and the controlling law now is the Bingo Enabling Act in Occupations Code Chapter 2001 together with the current 16 Texas Administrative Code Chapter 141. The department published further proposed Chapter 141 amendments on July 6, 2026 with comments open through August 17, 2026. Those are proposals: they are not current law and nothing in this guide treats them as operative.

An organization seeking recurring bingo needs a regular conductor license before it starts. Current department linked guidance describes a regular license term of up to two years, no more than three regular occasions per week, an occasion of no more than six hours, and a first time application submitted at least 30 days before the first planned occasion. Licensed conductors renew on the current timetable, beginning 45 days before expiration online or allowing a 30 day lead for paper, and file quarterly reports due January 25, April 25, July 25 and October 25.

Two bingo details are deliberately absent from this article. The exact temporary occasion quota for a regular conductor and the complete current fee schedule both remain VERIFICATION IN PROGRESS in the state guide, because no directly verifiable current source establishes them. No amount is inferred and no figure is carried over from the previous regulator.

Employment: four triggers that start on their own counts

Unemployment coverage for a section 501(c)(3) nonprofit uses its own test. The organization becomes subject to Texas unemployment tax when it employs four or more employees for some portion of a day in each of 20 different calendar weeks in a calendar year. The weeks do not have to run back to back. Once liable, the organization registers with the Texas Workforce Commission within 10 days.

Reporting then follows a fixed quarterly calendar: wage reports and contributions are due January 31, April 30, July 31 and October 31 for the preceding quarter, and the taxable wage base is the first $9,000 of wages paid to each employee in a calendar year.

Financing is a separate decision from coverage. A qualifying nonprofit may elect to reimburse the commission for benefits charged to its account instead of paying regular contributions. A newly established liable account generally makes that election within 45 days; an existing taxed employer uses Form C-6A by December 1 for the following calendar year. The election is generally binding for a minimum period, so it is not a choice to revisit casually.

New hire reporting is unrelated to any of that and starts immediately. Each new or rehired employee is reported to the Texas New Hire Reporting Program within 20 calendar days of the hire or rehire date. Employers filing electronically in batches may instead transmit two monthly reports not less than 12 nor more than 16 days apart.

Texas does not operate a state individual income tax withholding system, because the Texas Constitution prohibits a tax on individuals' net incomes unless constitutional conditions are met. That is a statement about Texas only. Federal payroll withholding continues in full, as do the Texas unemployment and new hire duties above.

Workers' compensation is the outlier. Texas generally allows private employers, including nonprofits, to choose whether to carry coverage, while governmental employers must provide it. Choosing not to subscribe is not the end of the matter: a nonsubscriber gives the required employee workplace notices and files Form DWC-005 during the annual February 1 through April 30 window and after specified status events. A nonsubscriber with at least five employees also has DWC-007 reporting for covered work related injuries, illnesses or deaths involving more than one day of lost time.

Licensing, events and advocacy: separate authorizations, never inferred from each other

The Governor's Business Permit Office states that Texas does not have a general business license. Read narrowly, that is accurate and helpful. Read loosely, it causes real harm, because it does not mean a nonprofit needs no licenses. Regulated activities, occupations, facilities, alcohol, food service, child care, zoning, fire and occupancy approvals can each apply, and many of them are local rather than statewide.

Alcohol at an event runs through the Texas Alcoholic Beverage Commission and nowhere else. A qualifying nonprofit applies for the Nonprofit Entity Temporary Event Permit at least 10 business days before the event. The permit is $50 per day, the authorization may cover no more than 10 consecutive days, and late filing draws escalating fees of $300 at 9 to 7 days out, $500 at 6 to 4 days, and $900 at 3 to 1 days. Gaming authority does not authorize alcohol and alcohol authority does not authorize gaming.

Advocacy involves three separate systems at once. Texas lobby registration with the Ethics Commission is triggered for 2026 when qualifying compensation or reimbursement exceeds $2,290 in a calendar quarter, or qualifying lobbying expenditures exceed $990 in a calendar quarter, subject to the exclusions and exemptions in the rules. Registration is filed no later than five days after the communication that triggers it. The annual fee is $750 ordinarily, or $150 for a registrant meeting the commission's qualified nonprofit condition. Those figures are expressly 2026 values and are adjusted over time.

Reporting then follows the registration. Lobby registration expires at the end of the calendar year. A registrant qualifying for modified annual reporting files by January 10; once the annual reporting limit is exceeded, monthly reporting begins and reports are due by the 10th of the following month.

Texas campaign finance is a second and distinct system. Direct campaign expenditure reporting under the 2026 Form DCE instructions is triggered above $170 in an election, with an electronic filing threshold above $34,890 in a calendar year. A political committee uses the campaign treasurer appointment system instead, filed before accepting contributions or making expenditures exceeding $1,140 under the 2026 instructions.

The third system is federal and applies regardless of what Texas requires. Section 501(c)(3) organizations are prohibited from participating or intervening in political campaigns for or against candidates. That is an Internal Revenue Service rule about federal exempt status, not a Texas campaign finance rule, and satisfying one says nothing about the other.

Closing down, and how to use the full Texas guide

Winding up comes before termination, not after. The organization uses the applicable authorization path, stops ordinary activities except as needed to wind up, collects assets, discharges or provides for liabilities, and deals with restricted assets. Remaining charitable and restricted assets are not ordinary property to distribute at will: the certificate, donor restrictions, the Chapter 22 nonprofit distribution rule and charitable trust principles all govern, and some situations require court or Attorney General involvement.

The Certificate of Termination on Form 652 then costs $5 for a nonprofit corporation. It ends the entity record at the Secretary of State and does nothing else. A registered foreign nonprofit withdraws on Form 608 for $5, with the same limitation.

Everything else closes separately, account by account: Comptroller franchise and sales accounts, unemployment tax with the Workforce Commission, subscriber or nonsubscriber status, any special solicitation registration, bingo, alcohol, lobbying and campaign accounts, and local permits. Each has its own final filing or account termination rule, and an organization that files only Form 652 typically leaves several of them open.

The full Texas state guide carries all 88 requirements, each with its applicability line, responsible agency, deadline, fee, exceptions and direct official source links, grouped into twelve always visible sections. Six of those 88 remain VERIFICATION IN PROGRESS and are labelled as such on the page, with the exact unresolved question and the safe approach stated on each card. Nothing in this article depends on any of them.