I am filing to form a 501(c)(3) non-profit organization that will
handle perhaps a thousand dollars a year. I can do it in Texas or in
California. Where should we found ourselves?

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Request for Question Clarification by serenata-ga on 30 Apr 2003 22:17 PDT

Hi Jay Campbell -

In which state do you intend to do business or the majority of your
business?

And what type of non-profit organization will you be forming?

Answering those questions will enable the Google Answers Researchers
to answer your question.

Thanks,
Serenata

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Clarification of Question by jaycampbell-ga on 30 Apr 2003 23:38 PDT

This is an online organization accepting donations and possibly the
sale of business services to fund humanitarian research projects.
Money could come from anywhere, and would be held in bank accounts in
either Texas or California. We are able to file for a fictitious
business name and build the rest of the legal organization in either
state.

I'm specifically interested in whether there are any tax, liability,
or any other considerations to take into account when deciding which
state to form in.

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Request for Question Clarification by easterangel-ga on 30 Apr 2003 23:54 PDT

Hi jaycampbell-ga!

I am putting this as a clarification because first of all it is a very
important piece of information that you must consider and second, I
would like to know if you would consider this as answer since it will
affect your choices significantly.

Since you mentioned that this would be an online organization and
money could come from anywhere then registering in either California
and Texas might not solve your concerns entirely. According to this
article from the About.com website, it might be necessary to register
in at least 40 states!

"The Internet is unique in that a Web site is available to be viewed
not only across the US but across the world. While this access is
extraordinary and inexpensive, it also makes your organization subject
to many jurisdictions that regulate fundraising activity. If you
provide opportunities for online fundraising and your web site can be
viewed by citizens of a particular state or even country, generally
you are considered to be operating there and soliciting funds."

"Registration is required in at least 40 states and, in an attempt to
facilitate an easier method to comply, a Uniform Registration Form
exists that can be used in at least 38 states. Even so, some of those
states require an extra paragraph of information or supplemental
documentation that keeps registration requirements a time-consuming
task."

"Online Fundraising - A Dangerous Proposition"
http://nonprofit.about.com/library/weekly/aa040703.htm

Just let me know if you think that this is a legitimate answer and I
will post it as an official one and claim the fee.

I hope this would aid you in any decisions that you will make.

Thanks!