Oklahoma
Updates
What You’ll Learn
If you’re a nonprofit in Oklahoma, or you’re a nonprofit considering fundraising or other activities in Oklahoma, you must understand the requirements that Oklahoma has established for nonprofits operating in the state.
How can you become familiar with these laws? Where should you start?
Start here. This state profile includes the basic requirements nonprofits must consider. Reading the profile and implementing appropriate compliance measures will help you prepare your organization for success in Oklahoma.
Getting to Know the State Nonprofit Corporation Law
Background
*Important primarily for nonprofits incorporated in Oklahoma
Emma Woodhouse, handsome, clever, and rich, with a comfortable home and happy disposition, seemed to unite some of the best blessings of existence; and had lived nearly twenty-one years in the world with very little to distress or vex her. She was the youngest of the two daughters of a most affectionate, indulgent father; and had, in consequence of her sister’s marriage, been mistress of his house from a very early period. Her mother had died too long ago for her to have more than an indistinct remembrance of her caresses; and her place had been supplied by an excellent woman as governess, who had fallen little short of a mother in affection.
- Emma, Jane Austen
When reading a novel, we get to know a fictional character by the author’s description. The author tells us about the character’s appearance, purpose, actions, mannerisms, and values.
Nonprofit corporations are something like fictional characters.
We learn how a nonprofit will look and act and make decisions not by reading a novel, but by reading the state law (called the nonprofit corporation act) and the rules the nonprofit makes for itself (called the bylaws and articles of incorporation). The law and the organization’s own rules tell us the organization’s name, purpose, way of acting, and method of making decisions.
To get to know your own nonprofit, be sure to review the sections below.
State Nonprofit Corporation Law
Corporate Governance
Conflict Transactions: Okla. Stat. Ann. tit. § 18-441-819 ; Need to review the basic best practices for conflicted transactions? See Bylaws Module 14: Conflicts of Interest.
Director Standards of Conduct: Okla. Stat. Ann. tit. § 18-441-818; Need a refresher on the role of directors? See Bylaws Module 6: Directors.
Members: Eligibility and Statutory Powers: Okla. Stat. Ann. tit. § 18-441-501 et. seq; Not sure what a “member” is? Need to review the basics? See Bylaws Module 5: Members.
Indemnification: Okla. Stat. Ann. tit. § 18-1031; Not sure what “indemnification” is? Need to review the basics? See Bylaws Module 8: Indemnification.
For Religious Nonprofits
Nonprofit Religious Corporation Act: Oklahoma’s nonprofit corporation law mentions the option for nonprofit corporations to incorporate for religious purposes. However, the law lacks both: (a) specific provisions to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs and (b) an option to incorporate expressly as a nonprofit religious corporation. Okla. Stat. Ann. tit. § 18-562; Confused about what it means to be a religious nonprofit corporation? See our whitepaper “Why a Religious Corporation?”
Reliance on Religious Guidance in Governance: Oklahoma law permits a director, in the fulfillment of the director’s fiduciary duties, to rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter, but does not expressly allow a director to rely on guidance from religious figures within his or her faith tradition. Okla. Stat. Ann. tit. 18 § 1027; 561
Understanding Religious Liberty in this State
Case Study
*Important for all nonprofits doing business in Oklahoma, whether incorporated in Oklahoma or elsewhere
The religious education and formation of students is the very reason for the existence of most private religious schools, and therefore the selection and supervision of the teachers upon whom the schools rely to do this work lie at the core of their mission. Judicial review of the way in which religious schools discharge those responsibilities would undermine the independence of religious institutions in a way that the First Amendment does not tolerate.
- Our Lady of Guadalupe School v. Morrisey-Berru, 140 S. Ct. 2049 (2020).
Sometimes, the state or local government (like the city or county) makes laws that could conflict with your organization’s free exercise of religion or its sincerely-held religious beliefs.
For example, a law might require employers not to make faith-based distinctions between job candidates. If your organization’s mission is to pass on the teachings of your faith, you will need to make faith-based distinctions in evaluating candidates because their faith commitments will impact their abilities to partner in your mission and witness the faith to your program participants.
So what do you need to do? Be aware of the laws listed below. If any of the laws impact your organization—for example, if you are an employer or a facility open to the public—learn more about how you can protect yourself by reviewing Napa Legal’s religious liberty resources. Talk to an attorney if you have specific concerns.
Religious Liberty Protections
State Religious Freedom Restoration Act: Oklahoma has enacted a RFRA protecting the religious free exercise of all individuals and entities by requiring government burdens on religious exercise to satisfy strict scrutiny. These protections originate in a statute rather than the state constitution. Okla. Stat. Ann. tit. § 51-253v2(A), (B); Not sure what a “religious freedom restoration act” is? Click here to learn the fundamentals.
State Constitutional Protection of Free Exercise: The Oklahoma Constitution follows in “lockstep” with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment. Okla. Const. art. I, § 2
State Blaine Amendment: The Oklahoma Constitution contains a Blaine Amendment that broadly restricts faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Current U.S. Supreme Court precedent has rendered this language ineffective, but it could become effective in the future if Court precedent changes. Okla. Const. art. II, § 5; Not sure what a Blaine Amendment is? Review the basics here.
Other Relevant State Laws and Regulations
Oklahoma currently has a broad state public accommodation law. Be sure you understand this and any local regulations that may apply to your organization.
Religious Freedom and Public Accommodation Laws: Oklahoma’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions. Okla. Stat. Ann. tit. 25, § 1402; Not sure what a public accommodation law is or what it means for your organization’s religious liberty? Learn the basics in this article which discusses the issue in the context of the case Fulton v. City of Philadelphia.
Protections for Religious Exercise in State of Emergency: Oklahoma law provides that religious worship can only be prohibited or restricted by an emergency order that (a) applies equally to all “essential” secular entities in the jurisdiction, (b) serves a compelling governmental interest, and (c) is narrowly tailored. Okla. Stat. Ann. tit. § 51-253v2(C)
Key Employment Laws and Regulations
In addition to tracking with the protected classes in the federal anti-discrimination employment law (race, color, religion, sex, and national origin), Title VII of the Civil Rights Act of 1964, Oklahoma prohibits employers from discriminating on the basis of age, genetic information, and disability. An employer is any person who has one or more employees. No religious exemptions apply to this requirement. Local governments may also have employment-related regulations. An attorney can help you understand what requirements apply to your organization.
Religious Liberty for Faith-Based Employers: Okla. Stat. Ann. tit. 25, §§ 1302, 1307; Need to review the basics on religious freedom and employment matters? Walk through a self-audit of best practices here.
Religious Liberty for Employees: Not Present
Conducting Activities or Programs in this State
Understanding the Business Registration Requirement
*Important primarily for nonprofits doing business in Oklahoma but incorporated elsewhere
If you are fundraising or conducting activities in this state, you must consider whether you need to register as a foreign nonprofit corporation. The state law requires entities that are “conducting a…not-for-profit activity” to register. An attorney can help you decide whether you need to register based on the type and volume of activities you have in this state.
Business Registration Statute
Fundraising and Charitable Registration in This State
How to Know (And What to D0) If You're Fundraising In This State
*Important for both Oklahoma and Foreign Nonprofits
Not sure what “charitable registration” is? Need to review the basics? Read this article for a refresher.
In Oklahoma, religious organizations are excluded from charitable registration requirements. The religious exemption is not limited to IRS Form 990 non-filers, such as churches. Okla. Stat. Ann. tit. 18, § 552.4.
If You're Fundraising In Multiple States, Make Sure You Understand the URS
In this state, organizations which are required to register do not have the option of registering through the Unified Registration Statement, which is a standardized charitable registration accepted in many states.
Evaluate Whether You'll Need a Registered Agent
Some states require charitable organizations to appoint a "registered agent" in the state as part of the organization's registration. Oklahoma has no such requirement for charitable and religious organizations. See Oklahoma’s charitable registration statute, Okla. Stat. Ann. tit. 18, § 552.3, and its exemption of organizations incorporated for religious purposes, Okla. Stat. Ann. tit. 18, § 552.4.
Follow the Rules About Communicating with the Public
Oklahoma does not require organizations to post specific language when conducting charitable solicitations.
Charitable Registration Statute
Charitable Registration Exemption Statute
Annual Report Requirement
Okla. Stat. tit. 18, § 552.3; Okla. Stat. tit. 18, § 552.4
Audit Requirements: Oklahoma does not require the submission of reviewed or audited financials as a condition of maintaining authorization to fundraise in the state. See Okla. Stat. Tit. 18, § 552.3
Get Acquainted with State and Local Taxes and Exemptions
State and Local Taxes
In Oklahoma, organizations exempt from federal income tax under the Internal Revenue Code (IRC Sec. 501(c)(3)) are automatically exempt from state income tax. Okla. Stat. Ann. tit. 68, § 2359(A). An organization may choose to send a copy of its IRS determination letter to the state department of revenue to indicate that it qualifies for the exemption. Note, however, that although an organization may be exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI may be subject to state income tax. Okla. Stat. Ann. tit. 68, § 2359(B). It is also important to consider whether applying for sales and use tax and property tax exemption would be appropriate for your organization. An accountant or attorney can provide specific answers to these questions.
Oklahoma also imposes a franchise tax on corporations doing business in the state, but, under Okla. Stat. Ann. tit. 68, § 1206, the franchise tax does not apply to organizations that are neither organized nor operated for profit.
It is also important to consider whether your organization might be eligible for sales and use tax or property tax exemption. In this state, federal § 501(c)(3) status does not automatically provide an exemption from sales, use and property taxes. More information about the sales and use tax exemptions and applications is available on the Oklahoma Department of Revenue website and in Oklahoma administrative rules. An accountant or attorney can provide answers to specific questions regarding your organization’s eligibility for exemption.
Corporate Income Tax Statute
Oklahoma imposes a corporate income tax but generally provides automatic exemptions to organizations with federal 501(c)(3) exempt status. Okla. Stat. Ann. tit. 68, § 2355; Okla. Stat. Ann. tit. 68, § 2359
Corporate Franchise Tax Statute
Okla. Stat. Ann. tit. 68, § 1203 (in-state corporations); Okla. Stat. Ann. tit. 68, § 1204 (out-of-state corporations); Okla. Stat. Ann. tit. 68, § 1203 (not for profit organizations exempt from franchise tax)
What You Need to Know About Sales Tax
Sales and Use Tax: Oklahoma imposes a sales and use tax on religious organizations’ sales and purchases and only provides exemptions for churches. Okla. Stat. Ann. tit. 68, § 1356v1; Must submit Form 13-16-A
State Tax Treatment of Unrelated Business Income: Okla. Stat. Ann. tit. 68, § 2359(B)
Property Tax: Oklahoma imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes. Okla. Stat. Ann. tit. 68 § 2887
State-Specific Special Requirements
Miscellaneous
Reviewed by
Legal Disclaimer
This resource contains general educational information related to legal concepts, but this information does not constitute legal advice. Anyone seeking legal advice is strongly encouraged to consult with a licensed attorney regarding any of the matters discussed herein. Although licensed attorneys work with Napa Legal, Napa Legal is not a law firm and does not undertake legal representation on behalf of any clients. Further, no licensed attorney working with or on behalf of Napa Legal agrees to undertake legal representation on behalf of any client unless the terms of such representation are set forth in a separate, written representation agreement.
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**Please note that the following state profiles are forthcoming and will be published soon:Hawaii and Washington