At a Glance

Vermont nonprofits must file a biennial report with the Secretary of State every two years between January 1 and April 1, plus annual IRS Form 990 filings to maintain their tax-exempt status. Unlike many states, Vermont does not require charitable registration for most nonprofits themselves, focusing regulation on paid fundraisers instead.

Running a Vermont nonprofit comes with incredible rewards, but keeping up with those yearly paperwork obligations can feel like navigating a maze blindfolded. From biennial reports to Form 990 submissions, the filing landscape is complex and the consequences for missing deadlines can be severe.

Unfortunately, many nonprofit leaders discover compliance gaps only after receiving penalty notices or, worse, having their tax-exempt status revoked. The good news? With proper planning and knowledge, you can smoothly handle all your Vermont filing obligations.

This step-by-step guide breaks down everything you need to know about maintaining your nonprofit’s compliance. We’ll cover all essential state regulatory filings, state tax requirements, and federal tax obligations that Vermont nonprofits must address annually without getting sidetracked by initial formation paperwork or employment requirements.

Ready to master your nonprofit annual filing requirements and keep your organization’s legal status squeaky clean? Let’s dive in!

Understanding Vermont’s Annual Filing Landscape

Vermont nonprofits face a patchwork of recurring filing obligations that can easily overwhelm even experienced administrators. Understanding which documents you need to file, when they’re due, and how to complete them correctly forms the foundation of proper nonprofit management.

What counts as an annual filing

Annual filings for Vermont nonprofits typically fall into three main categories:

1. State regulatory filings: These include your Vermont Biennial Report filed with the Secretary of State’s office every two years. This report confirms your organization’s continued existence and updates basic information about your nonprofit.
2. Federal tax filings: Most notably, this includes your IRS Form 990 series (990-N, 990-EZ, 990, or 990-PF) that must be submitted annually to maintain your federal tax-exempt status. The specific form you’ll file depends on your organization’s annual gross receipts and total assets.
3. State tax-related filings: Although nonprofits are generally exempt from income taxes, you may need to file annual renewals for sales tax exemptions or other state-specific tax forms to maintain various exemptions.

Additionally, if your organization uses paid fundraisers, those professionals must register with the Vermont Attorney General’s Office (802-828-3171, ago.vermont.gov) and complete annual renewal documentation.

Why compliance matters for nonprofits

Maintaining compliance with filing requirements protects your organization in several critical ways.

First and foremost, timely filing preserves your tax-exempt status. When you fail to file required federal forms for three consecutive years, the IRS automatically revokes your tax-exempt status. Consequently, your organization becomes subject to income taxes, and donations received become non-deductible for your supporters.

Furthermore, missing state filings can result in your nonprofit being administratively dissolved. This dissolution effectively terminates your organization’s legal existence in Vermont, potentially exposing board members to personal liability.

Missing deadlines also typically triggers penalties and late fees, diverting precious resources from your mission. Meanwhile, public disclosure of your compliance history can damage donor confidence and organizational reputation.

Common misconceptions about filing requirements

Many nonprofit leaders operate under misconceptions that can lead to compliance problems. One widespread misunderstanding is that small nonprofits don’t need to file anything. In reality, even tiny organizations with minimal revenue must submit the 990-N e-Postcard annually.

Another common error involves assuming that filing extensions automatically apply to all forms. While you can request extensions for some filings, others have firm deadlines with no flexibility.

Some nonprofit administrators mistakenly believe that Vermont’s biennial report schedule (every two years) applies to all state filings. However, federal Form 990 requirements follow an annual cycle, not biennial.

Additionally, many organizations incorrectly assume that their tax-exempt status permanently exempts them from all filing requirements. In contrast, this status must be actively maintained through proper annual reporting.

Perhaps most dangerously, some nonprofit leaders believe they’ll receive reminders or warnings before serious consequences occur. Unfortunately, while some agencies send courtesy notices, the ultimate responsibility for tracking and meeting deadlines rests entirely with your organization.

At Labyrinth, Inc., we help nonprofits track these varying deadlines and requirements across multiple jurisdictions, ensuring that organizations maintain their good standing with state agencies through proper filing management and deadline monitoring.

Understanding these requirements thoroughly allows you to create a comprehensive compliance calendar that prevents surprises and protects your nonprofit’s standing and reputation in Vermont.

Filing the Vermont Biennial Report

Vermont nonprofit organizations must regularly file a biennial report as part of their ongoing compliance requirements. Unlike for-profit entities that file annually, nonprofits follow a different schedule that’s important to understand to maintain good standing.

Who must file and when

All nonprofit corporations and nonprofit cooperative corporations in Vermont must file biennial reports rather than annual ones. The term “biennial” indicates these reports are required every two years, not annually. Specifically, you must renew your nonprofit registration beginning the first year following your initial registration.

The filing window remains consistent: biennial reports must be submitted between January 1 and April 1 of the reporting year. For instance, if your nonprofit was incorporated anytime in 2024, your first biennial report would be due during the January–April window of 2025.

Notably, failing to file by the deadline doesn’t just result in fees. It can ultimately lead to your nonprofit being administratively dissolved or having its authority to operate in Vermont revoked.

How to file online or by mail

The Vermont Secretary of State (802-828-2386, sos.vermont.gov) now requires all biennial report filings to be completed online through their Online Business Service Center. The process involves several straightforward steps:

1. Log into the Online Business Service Center (creating a user account if you’re a first-time filer)
2. Select “File your Annual/Biennial Report” from the main menu
3. Follow the prompts to confirm, update, or enter all required information

Though online filing is the standard method, there is an accommodation for those wishing to pay by check rather than electronically. In this case, you would still complete the form online but select “I Want to Print & Mail With Check” at the bottom of the payment screen. Subsequently, you would mail the printed form with your check to the Vermont Secretary of State.

Filing fees and late penalties

The filing fee for a Vermont nonprofit biennial report is $40.00. This fee must be paid each time you file (every two years).

Should you miss the April 1 deadline, prepare to pay an additional $25.00 late fee. Even more importantly, failure to file can put your nonprofit at risk of being dissolved or having its right to conduct business in Vermont revoked. This administrative dissolution would effectively terminate your nonprofit’s legal existence in the state.

Furthermore, to reinstate a dissolved nonprofit, you would need to file reinstatement documents and pay all outstanding fees, which could significantly impact your organization’s finances and operations.

We help nonprofits avoid these penalties by tracking biennial report deadlines and ensuring timely submission of required documentation to maintain good standing with state agencies.

What information you need to include

Your Vermont biennial report requires several key pieces of information:

• Business name and Business ID
• Principal office address (must be a street address, not a PO Box)
• Mailing address (if different from principal address)
• Business email address
• Names and addresses of directors/officers or members/managers
• The month your previous fiscal year ended

Particularly important is that anyone with authority to prepare and submit business filings can file the biennial report. Original signatures are not required, nor is notarization.

Once approved, you’ll receive confirmation via email, and your nonprofit will maintain its good standing with the state of Vermont.

Federal IRS Form 990 Requirements

Beyond state requirements, every nonprofit organization must fulfill annual federal tax obligations to maintain tax-exempt status. The Form 990 series represents the cornerstone of these federal filing requirements.

Which version of Form 990 to file

The IRS offers several versions of Form 990, with the appropriate form determined by your organization’s financial profile:

• Form 990-N (e-Postcard): For organizations with gross receipts normally ≤ $50,000
• Form 990-EZ: For organizations with gross receipts < $200,000 and total assets < $500,000
• Form 990 (full version): Required if gross receipts ≥ $200,000 or total assets ≥ $500,000
• Form 990-PF: Required for all private foundations regardless of financial status

Remember that gross receipts refer to the total amounts received from all sources during your accounting period without subtracting expenses.

Deadlines based on fiscal year

Form 990 must be filed by the 15th day of the 5th month after your organization’s accounting period ends. For instance, if your fiscal year ends December 31, your filing deadline is May 15 of the following year.

Need more time? You can request an automatic 6-month extension using Form 8868. Nevertheless, for organizations filing Form 990-N, the deadline cannot be extended, yet there’s no penalty for late submission unless it’s the third consecutive year.

Consequences of missing the deadline

Filing late carries significant penalties. For organizations with gross receipts not exceeding $1,129,000, the penalty is $20 per day up to a maximum of $11,000 or 5% of gross receipts, whichever is less. Organizations with gross receipts exceeding $1,129,000 face steeper penalties of $110 per day with a maximum of $56,000.

Most critically, failing to file any version of Form 990 for three consecutive years results in automatic revocation of your tax-exempt status. This means your organization would become subject to income tax, and donations would no longer be tax-deductible for donors.

Tips for accurate and timely filing

First, maintain organized financial records year-round instead of scrambling at deadline time. According to IRS guidelines, incomplete or incorrect returns will be sent back with a notice letter, further delaying your filing.

Second, determine early which form you need to file based on your financial thresholds. Many organizations mistakenly file the wrong version, causing unnecessary complications.

Third, consider using an IRS-certified e-file provider to streamline submission. The IRS now mandates electronic filing for most organizations.

Finally, mark your calendar with both the initial deadline and a reminder several weeks earlier to begin preparation. This proactive approach helps ensure compliance with federal requirements and protects your nonprofit’s valuable tax-exempt status.

We assist nonprofits in organizing their filing documentation and tracking these critical federal deadlines to ensure compliance with IRS requirements and prevent the loss of tax-exempt status.

Charitable Registration and Renewal in Vermont

Vermont’s approach to charitable registration differs markedly from many other states, focusing primarily on regulating professional fundraisers rather than the nonprofits themselves. Understanding these requirements helps your organization maintain proper compliance and avoid potential penalties.

Who needs to register with the Attorney General

In Vermont, most charitable organizations themselves are not required to register with the state before soliciting contributions. Instead, registration requirements focus on paid fundraisers working on behalf of nonprofits. Professional fundraisers must register with the Vermont Attorney General’s Office (802-828-3171, ago.vermont.gov) before beginning fundraising activities. This contrasts with requirements in many other states that mandate registration for all fundraising nonprofits regardless of who conducts the solicitation.

Annual renewal process and documents required

For paid fundraisers who must register, the renewal process involves several components:

• Submitting annual financial reports
• Maintaining a $20,000 bond
• Paying a renewal fee of $500.00 annually
• Filing post-campaign financial reports within 90 days after a campaign has ended

Professional fundraisers must initially file a Notice of Solicitation with the Attorney General’s Office before each campaign begins, along with a $270.00 fee per campaign.

Exemptions from registration

Certain organizations are exempt from charitable registration requirements in Vermont, including:

• Religious organizations
• Educational institutions
• Small nonprofits

Where and how to submit

As of now, all reporting to the Vermont Attorney General’s Office is accepted exclusively through electronic means. The state no longer accepts paper filings for these requirements.

For electronic submission, paid fundraisers must:

1. Create an account in the electronic filing system (for first-time users)
2. Submit all required documents through the online portal
3. Pay applicable fees electronically

Questions regarding the submission process should be directed to ago.paidfund@vermont.gov.

First and foremost, verify whether your organization employs professional fundraisers, as this triggers specific registration obligations. Moreover, remember that some Vermont counties and municipalities may impose their own registration requirements for in-person solicitation, necessitating research at the local level.

When nonprofits do work with paid fundraisers, we help monitor the renewal process and track deadlines to ensure all required documentation is submitted on time to maintain compliance with Vermont’s Attorney General requirements.

Overall, whereas Vermont’s state-level registration requirements are less burdensome for nonprofits themselves compared to many states, organizations utilizing paid fundraisers face substantial compliance obligations that must be carefully managed.

Maintaining State Tax Exemptions

Securing your nonprofit’s tax exemptions in Vermont involves specific filing requirements that must be properly maintained. While federal tax-exempt status is critical, Vermont has its own processes for managing state tax exemptions.

Sales and use tax exemption process

In Vermont, only federally designated 501(c)(3) organizations qualify for sales tax exemption on purchases. Organizations with tax-exempt status under subsections 501(c)(4)-(13) and (19), as well as political organizations under 26 U.S.C. § 527(e), remain subject to sales and use tax unless specifically exempted. This distinction is essential to understand as many nonprofits incorrectly assume all tax-exempt organizations automatically receive sales tax exemption.

Foreign nonprofits (those based outside Vermont) that conduct activities within the state must adhere to the same tax requirements as Vermont-based organizations. Therefore, out-of-state nonprofits should not assume exemption from Vermont sales tax simply because they have exemption in their home state.

Filing Form S-3 with the Department of Taxes

To utilize your sales tax exemption, you must first register for a Vermont Business Tax Account with the Department of Taxes (802-828-2551, tax.vermont.gov). Thereafter, complete Form S-3 (Vermont Sales Tax Exemption Certificate for Resale and Exempt Organizations).

Form S-3 requires:

• Complete and accurate information
• Proper designation of exemption type
• Details about both buyer and seller

Once completed, present the form to vendors at the time of purchase. Importantly, sellers must accept this certificate in “good faith,” meaning they must reasonably believe the purchase qualifies for exemption. The burden of proof lies with the seller to demonstrate the certificate was accepted properly.

When to renew or update exemption status

Fortunately, Vermont does not require annual renewal of sales tax exemption certificates. Once established, your exemption remains valid without periodic renewal requirements. Nevertheless, you should update your information with the Department of Taxes whenever significant organizational changes occur, such as:

• Changes in your nonprofit’s name
• Address changes
• Modifications to your tax-exempt status
• Changes in organizational structure

Remember that sellers must retain exemption certificates for at least three years from the date of the last covered sale, essentially making them your partners in maintaining proper documentation of your exempt status.

For organizations operating in multiple states, we help track varying exemption requirements and update procedures to ensure compliance across all jurisdictions where your nonprofit operates.

Conclusion

Staying compliant with Vermont’s nonprofit filing requirements demands vigilance and careful planning. For nonprofits managing multiple state obligations or operating in various jurisdictions, professional compliance support can streamline the tracking and preparation of biennial reports, Form 990 submissions, and maintenance of tax exemptions to protect your organization from severe consequences like automatic revocation of tax-exempt status or administrative dissolution.

Missed deadlines certainly result in penalties and fees that drain resources away from your mission. Each filing serves a specific purpose: biennial reports confirm your continued existence, Form 990 maintains federal tax exemption, while proper documentation preserves your state tax benefits.

Though Vermont’s system offers some advantages, such as biennial rather than annual state reporting and limited charitable registration requirements, you must still track multiple deadlines throughout the year. Consider creating a comprehensive compliance calendar that includes all filing dates based on your fiscal year.

Remember, the responsibility falls entirely on your organization to meet these obligations without expecting reminders. Even small nonprofits with minimal revenue face filing requirements, despite common misconceptions.

Above all, treat compliance as an essential operational function rather than a burdensome administrative task. Your tax-exempt status represents one of your nonprofit’s most valuable assets. Through proper planning and timely submissions, you can focus your energy where it belongs: on your organization’s mission and the communities you serve.

Frequently Asked Questions