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Applying for Exemption - Tax Status of Government Entities

Does a government entity need to apply for exemption?

Most state and local government entities are not required to pay federal income tax. For non-tax reasons, though, government entities are sometimes asked to provide a tax-exempt number or determination letter to prove their status as a tax-exempt organization.  State and local governments are not required to apply for this exempt status, however.  As discussed in Affirmation of Your Tax-Exempt Status, the IRS will issue a letter describing the tax status of government entities.  Most organizations and individuals will accept this letter as the substantiation that they need.  No application is required, and no fee is associated with this letter.

 

Page Last Reviewed or Updated: 26-Nov-2013