Legislation would ease non-profit filing burdens amid the pandemic

Updated June 19, 2020

New Jersey legislation introduced May 1, 2020, would give charities would receive extra time to submit their corporate annual reports and annual charities registration renewals in light of the COVID-19 emergency, and would raise the threshold for mandatory audits for charitable registration purposes.

A-3997, sponsored by Assemblywoman Yvonne Lopez, would provide important relief for New Jersey non-profits and charities in several ways:

• Corporate Annual Reports – For corporate annual reports that are filed with the New Jersey Department of Treasury, Division of Revenue and Enterprise Services pursuant to the New Jersey Nonprofit Corporation Act, filing deadlines that fall during the state of emergency declared by Governor Murphy under Executive Order 103 of 2020 (EO103), or up to 180 days after the conclusion of that state of emergency, would be extended by up to 180 days without penalty.
• Charities Registration Renewals – For charities registration renewals registrations and annual financial reports filed with the New Jersey Department of Law and Public Safety, Division of Consumer Affairs, Charities Registration Section, filing deadlines that fall during or 180 days following the conclusion of EO103 would be extended up to 180 days without penalty. Further, the Division would be prohibited from requiring advance payment of the annual filing fee in order for the extension to take effect; the filing fee would be due when the registration renewal and report are filed.
• Charities Registration Audit Threshold – The bill would raise the threshold for which an annual charities registration financial report must be accompanied by an independent audit from $500,000 to $1 million in gross receipts. The current threshold was last raised by regulation from $250,000 to $500,000 in 2011 and is among the lower ones in the country. The financial reports for charities whose gross receipts in the previous fiscal year were between $25,000 and $1 million would be required to be certified by the organization’s president or other authorized officer of the governing board. As is the case under current law, the Attorney General would retain the authority to request an audited financial statement from an organization whose gross receipts are below the mandatory threshold. Of course, any organization would remain free to obtain audited financial statements if desired.

A-3997 is one of a series of relief actions advocated by the Center for Non-Profits to help charities as they cope with the effects of the current COVID-19 health emergency. It has been referred to the Assembly Appropriations Committee for consideration.   A Senate counterpart bill, S-2533 (Greenstein), was introduced June 8 and is awaiting consideration in the Senate Commerce Committee.

For more information or to become involved, email Doug Schoenberger at doug @ njnonprofits.org or Linda Czipo at lczipo @ njnonprofits.org (remove spaces in the email address before sending).

This article is intended for general informational purposes and does not constitute legal advice or a legal opinion. For answers to specific questions concerning your situation, you should consult a knowledgeable attorney who can advise you regarding your particular circumstances.