How to Complete and Submit Form AP-204: Texas Application for Tax Exemption

Form AP-204, the Texas Application for Exemption – Federal and All Others, is the application nonprofits and other qualifying entities file with the Texas Comptroller of Public Accounts to receive state sales tax exemption, franchise tax exemption, or both. You download the fillable PDF from the Comptroller’s website, complete it with your supporting documents, and mail or fax the package to the Exempt Organizations Section in Austin. There is no filing fee.

What the Exemption Covers

AP-204 can grant two separate kinds of tax relief, and the category you apply under determines which you get.

A sales and use tax exemption means your organization does not pay Texas sales tax on taxable items purchased for its exempt purpose. Purchases have to relate directly to your exempt activities; personal items bought by employees or volunteers are never covered, even when the organization reimburses them.¹

A franchise tax exemption removes the requirement to pay Texas franchise tax on your entity’s margin.²

One boundary to know up front: organizations exempt under federal 501(c) status are generally not exempt from state hotel occupancy tax. A separate form, 12-302, handles that.³

Is AP-204 the Right Form for You

AP-204 covers more than twenty categories listed in its first section. The most common path is a federal income tax exemption under IRC Section 501(c), but you can also apply as a credit union, volunteer fire department, cemetery corporation, electric cooperative, nonprofit water supply corporation, housing finance corporation, or several other listed entity types.⁴

Organizations holding an IRS determination letter under IRC Section 501(c)(3), (4), (8), (10), or (19) can apply for both Texas sales tax and franchise tax exemption through AP-204. This group includes charitable nonprofits, civic leagues, fraternal beneficiary societies, domestic fraternal societies, and veterans’ organizations.⁵

Nonprofit corporations exempt under IRC Section 501(c)(5), (6), or (7), meaning labor and agricultural organizations, business leagues, and social clubs, qualify for franchise tax exemption only through this form. They do not receive a sales tax exemption with it.⁶

Religious and educational organizations that qualify under Texas law without a federal exemption should file different forms: AP-209 for religious organizations and AP-207 for educational organizations. Charitable organizations applying under the state-law definition use AP-199. AP-204 is for applicants claiming exemption based on a federal determination or one of the other specific categories named on the form.

An organization formed outside Texas does not automatically receive a Texas exemption. You still apply through the Comptroller’s office before making tax-free purchases in the state, and the form requires out-of-state applicants to include a file-stamped copy of their formation documents and a current Certificate of Existence from the Secretary of State (or equivalent officer) in their home state.⁴

Documents to Gather First

The Comptroller returns incomplete applications, so pull everything together before you open the PDF. For most applicants claiming a federal exemption, that means:

Your IRS determination letter confirming tax-exempt status under the applicable IRC section. If the letter is more than four years old, you need a current verification letter from the IRS instead.³
Your formation documents: Articles of Incorporation, or for an unincorporated organization, whatever governing document establishes the entity.
Your Texas Secretary of State file number and file date, if you are registered. If not, you check a box on the form indicating that.
For out-of-state organizations, a file-stamped copy of your formation documents and a current Certificate of Existence from your home state.⁴

The Comptroller’s publication 96-1045, Guidelines to Texas Tax Exemptions, lists the specific documentation each category requires. Read it before you submit. If you send the form without the documents it describes, the Comptroller will return the package and ask for more information, which adds weeks to the process.⁴

Completing the Form

AP-204 is a fillable PDF. The Comptroller’s instructions ask you to type or print, leave shaded areas blank, and remove all staples from the package before sending.

In the exemption category section, check the box that matches your organization. If you are applying based on an IRC 501(c) exemption, check the federal exemption box and write in your specific subsection.

Enter your legal name exactly as it appears on your Articles of Incorporation or governing document. A mismatch between the name on the form and the name on your IRS letter or formation documents is one of the most common reasons applications come back.

Fill in the mailing address with street number or P.O. Box, city, state, ZIP code, and county (or country if outside the U.S.).

Enter your 11-digit Texas taxpayer number if your organization has one from the Comptroller. Leave it blank if you have not previously registered. Enter your 9-digit federal EIN; this is required when you are applying based on a federal exemption.

Provide your Texas Secretary of State file number and the date filed. If your organization is not registered with the Secretary of State, check the box indicating that.

In the contact section, give the name, email, firm or company name, daytime phone, and mailing address for the person the Comptroller should reach about the application. The Comptroller will email a notification when the exemption is added so you can verify it online. If you do not provide an email address, indicate whether the response should go to the organization’s mailing address or the submitter’s.

An authorized representative signs and dates the form. Before you send it, check that the legal name, EIN, and exemption category all line up with the supporting documents.

Where to Send It

Mail or fax the completed application and all supporting documents to:

Texas Comptroller of Public Accounts
Exempt Organizations Section
P.O. Box 13528
Austin, Texas 78711

Fax: (512) 475-5862.⁴

For questions before submitting, the Exempt Organizations Section can be reached at exempt.orgs@cpa.texas.gov or 800-252-5555. There is no online filing option; the form is PDF-only as of 2026.⁷

What Happens After You Submit

Applications are processed in the order received. The office does not publish a turnaround time, so plan ahead. Review commonly takes several weeks, longer if the Comptroller requests additional information. When your application clears, you will get notification by email, or by mail if you did not provide an email address.

Once approved, you can verify your exempt status on the Comptroller’s website and print verification letters and Form 01-339, the Texas Sales and Use Tax Exemption Certification, which you give to vendors when making tax-free purchases.⁸

Keeping the Exemption in Good Standing

Texas exemptions for nonprofits do not expire and do not require periodic renewal, but a few obligations continue after approval.

Notify the Comptroller in writing right away if your organization’s purpose or activities change in a way that means you no longer qualify. If the IRS revokes your federal exemption, send a copy of the IRS documentation to the Comptroller immediately; your Texas exemption rests on that federal status, so losing one typically means losing the other.³ Address and phone changes can be made through the Comptroller’s online form using your 11-digit taxpayer number or Secretary of State filing number.⁹

Keep records for at least four years. The Comptroller can audit your purchases to verify they relate to your exempt purpose, and you need sales invoices, exemption certificates, purchase invoices, general ledgers, financial statements, and bank statements available for that long. The audit window can extend beyond four years in cases involving suspected fraud or a missing required permit.¹⁰

If the Comptroller revokes the exemption, the organization becomes subject to the tax effective on the date of revocation, with no grace period.³ Using an exemption certificate to buy items for personal use or purposes unrelated to the organization’s exempt function is a criminal offense in Texas, with penalties ranging from a Class C misdemeanor to a second-degree felony based on the amount of tax evaded.¹¹

1
Texas Comptroller of Public Accounts. Nonprofit and Exempt Organizations – Purchases and Sales
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Texas Comptroller of Public Accounts. Franchise Tax
3
Texas Comptroller of Public Accounts. Guidelines to Texas Tax Exemptions
4
Texas Comptroller of Public Accounts. Texas Application for Exemption – Federal and All Others
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Texas Comptroller of Public Accounts. 501(c)(3), (4), (8), (10) or (19)
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Texas Comptroller of Public Accounts. 501(c)(2), (5), (6), (7), (16) or (25)
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Texas Comptroller of Public Accounts. Texas Applications for Tax Exemption
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Texas Comptroller of Public Accounts. Charitable
9
Texas Comptroller of Public Accounts. Change Mailing Address/Phone Number
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Texas Comptroller of Public Accounts. The Auditing Process
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Legal Information Institute. 34 Texas Admin Code 3.287 – Exemption Certificates