Effective July 1, 2024, Florida has implemented significant updates to its statutes governing the solicitation of contributions by charitable organizations. These changes represent a proactive shift aimed at enhancing regulatory clarity and operational efficiency within the charitable sector. These amendments introduce pivotal changes, including criteria for exemption based on contributions, revised financial statement filing requirements, updated fee structures, and clarified definitions. Understanding and implementing these changes is crucial for charitable organizations to maintain compliance and operational efficiency in Florida’s regulatory landscape.
Exemption Based on Contributions Rather Than Revenue
The amendment to section 496.406(1)(d) of the Florida Statutes introduces a significant change for charitable organizations seeking exemption from registration requirements. Instead of basing exemption on total revenue, organizations can now qualify based on total contributions during a fiscal year. This adjustment aims to streamline the registration process while maintaining oversight. Organizations with less than $50,000 in total contributions in the preceding fiscal year and whose activities are exclusively carried out by unpaid personnel are eligible to apply for exemption using the FDACS-10110 form. This change recognizes the significant contribution of unpaid personnel to the organization. However, if an organization surpasses the $50,000 threshold in contributions during the fiscal year, it must file the Solicitation of Contributions Registration Application (FDACS-10100) within 30 days.
Financial Statement Filing Changes
Under section 496.407(3), the statutory revision eliminates the previous provision allowing a 180-day extension for filing financial statements. Organizations completing the FDACS-10100 application may request an extension for the financial statement filing based on its extended due date with the IRS. This extension request requires documentation demonstrating approval from the IRS for an extension. The Florida Department of Agriculture & Consumer Services (FDACS) will align the extension date with the IRS-approved date. Failure to submit the required financial statement by the extension deadline will automatically result in the suspension of the organization’s registration. Notably, organizations completing the FDACS-10110 form for small charitable organizations are not eligible for the extension.
Fee Structure Update
Section 496.405 undergoes an adjustment concerning fee structures applicable to charitable organizations. The revision removes the $10 fee previously applicable to organizations with contributions below $50,000. This change aims to alleviate the financial burden on smaller charitable entities while ensuring compliance with regulatory requirements.
Definition Clarifications
In section 496.404, the statute clarifies and standardizes the definition of “street address” across multiple sections. The term “street address” replaces previous terms such as “residence address,” “mailing address,” or “home address.” Furthermore, the definition explicitly excludes virtual offices, post office boxes, or mail drops from qualifying as valid street addresses. This clarification aims to enhance the accuracy and consistency of address information provided by charitable organizations during registration and reporting processes.
Implementation and Compliance Considerations
Implementing these statutory changes requires careful consideration and proactive steps from charitable organizations:
- Education and Awareness: Educate personnel on the revised requirements to ensure compliance and avoid penalties.
- Operational Adjustments: Review and adjust operational procedures to align with new filing deadlines and exemption criteria based on contribution thresholds.
- Documentation Compliance: Maintain thorough documentation to support any extension requests for financial statement filing, adhering to both IRS and FDACS guidelines.
- Address Verification: Verify and update organization addresses to ensure they conform to the clarified definition of “street address,” thereby avoiding potential registration issues.
- Monitoring Contributions: Implement mechanisms to monitor and track contributions throughout the fiscal year to respond to registration requirement changes promptly.
Conclusion
By proactively addressing these considerations, charitable organizations can navigate the updated statutory landscape effectively, ensuring continued compliance with Florida’s solicitation of contributions regulations. These changes aim to balance regulatory oversight with operational flexibility, fostering a transparent and supportive environment for charitable activities within the state. A CPA firm experienced in the not-for-profit industry can help ensure compliance. Rivero, Gordimer & Company has been an industry leader, serving more than 150 local and national nonprofits annually. We are proud to be recognized as the exclusive Tampa Bay member of Nonprofit CPAs, a nationwide affiliation of independently-owned accounting firms committed to delivering exceptional financial and consulting services to nonprofit organizations.
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