What is a Group Exemption?

California Garden Clubs, Inc. is a not-for-profit educational organization under Section 503(c)(3) of the Internal Revenue Code. This section affords CGCI tax-exempt status. CGCI member clubs and districts that are in good standing, qualify under the rules set forth by the Internal Revenue Service of the United States of America, and apply to CGCI to be included can be granted tax-exempt status under the blanket exemption granted to CGCI as the parent organization.

The application made by CGCI for a group exemption letter recognizing subordinate clubs and districts of the type described in Section 501 (c)(3) of the Internal Revenue Code was approved by the Internal Revenue Service on November 15, 2006.

The application made by CGCI to the California Franchise Tax Board for a group exemption acknowledgement under Revenue and Tax Code Section 23701d was accepted November 9, 2010, retroactive to November 15, 2006.

By obtaining these Group Exemptions, CGCI is able to pass along to its subordinates its tax exemption status under both Federal and California codes.  Thus, qualifiying Group Exemption member clubs and districts are eligible to be considered tax-exempt organizations under the same status as CGCI, as long as they follow the guidelines set by CGCI on the basis of IRS and California FTB requirements.  In order to continue in the CGCI Group Exemption, the member clubs and districts also need to meet all Federal and California tax form and filing requirements.

By being included in the Group Exemption Letter, the subordinates do not have to file an application for exemption and can accept donations that are tax-deductible under the law. A major benefit is that clubs and districts that are accepted as members of theGroup Exemption do not have to pay the fees to obtain an exemption letter.

To go to the Group Exemption Program page, click here.

To see the Frequently Asked Questions, click here.

To get instructions and forms needed to apply for the program, click here.

Updated August 12, 2011