How to start a nonprofit in Minnesota

Short answer: To start a nonprofit in Minnesota, you incorporate by filing Articles of Incorporation under Chapter 317A with the Minnesota Secretary of State ($70 by mail, $90 expedited online or in person, as of 2026), get a free EIN from the IRS, adopt bylaws, and seat a board of at least three directors. Then comes the part people miss: a nonprofit is not automatically tax-exempt, so you file IRS Form 1023 (or 1023-EZ) to become a 501(c)(3). On the Minnesota side, you register with the Attorney General’s Charities Division before soliciting donations (a $25 fee, as of 2026), and — unlike many states — you can claim a real sales tax exemption by filing Form ST16 with the Minnesota Department of Revenue. Once that exemption is approved, the nonprofit hands vendors Form ST3 to buy supplies tax-free.

The federal core — EIN, bylaws, board, and the 501(c)(3) application — is the same in every state. For the full national walkthrough, read how to start a nonprofit; this page focuses on the Minnesota layer stacked on top of it, where the state-specific forms, fees, and agencies actually live.

The formation steps that are the same anywhere

Forming a nonprofit in Minnesota follows the standard checklist, and most of it is federal rather than state-specific:

1. Incorporate under Minnesota’s Nonprofit Corporation Act (the Minnesota-specific part — covered in detail below).
2. Get an EIN — a free federal tax ID from the IRS, applied for directly at irs.gov. Never pay a third party for one; the EIN is always free.
3. Adopt bylaws — the organization’s internal rulebook for decisions, leadership, and money. Start from a proven document rather than a blank page; see nonprofit bylaws for what to include.
4. Seat a board of directors who govern the organization, set policy, and hold it accountable.
5. Apply for 501(c)(3) with Form 1023 — this is the step that turns a nonprofit corporation into a tax-exempt charity. Unlike a church, an ordinary nonprofit is not automatically exempt; you must file IRS Form 1023 (or the streamlined Form 1023-EZ if you qualify) and receive a determination letter (IRS, applying for 501(c)(3) status). The full path is in how to start a 501(c)(3).
6. Open a bank account in the nonprofit’s legal name using the EIN and formation documents.
7. Set up the books on fund accounting from day one, before the first grant or donation arrives.

Each of these is walked step by step in the national formation guide linked above. The rest of this page is the Minnesota layer on top.

Incorporating a nonprofit in Minnesota

Minnesota creates the nonprofit as a legal entity when you file Articles of Incorporation under Chapter 317A, the Minnesota Nonprofit Corporation Act, with the Minnesota Secretary of State. The filing fee is $70 by mail or $90 for expedited service when you file online or in person, as of 2026; confirm the current amount with the Minnesota Secretary of State, since fees change. The state offers a fill-in Articles template you can mail to St. Paul or submit through the online filing portal.

The Articles ask for the nonprofit’s name, its registered office address in Minnesota, and the name and address of each incorporator. To satisfy the IRS later, the document also needs two clauses that the bare state template does not force you to include, so write them in:

• A 501(c)(3) purpose clause stating the organization is formed exclusively for charitable, religious, educational, or other exempt purposes.
• A dissolution clause stating that if the nonprofit closes, its assets pass to another 501(c)(3) organization, not to any individual.

Getting that language right at formation saves an amendment later. The full breakdown of what these documents need is in articles of incorporation. On board size, Minnesota is stricter than some states: a nonprofit board must have three or more directors under Minnesota Statutes section 317A.203, so a one-person board is not an option here — which is fine, because the IRS treats a single-director nonprofit as a red flag on the 1023 anyway.

Registering with the Minnesota Attorney General

Here is the step that trips up nonprofits coming from a church background, where it usually does not apply: Minnesota requires most charities to register with the Attorney General’s Charities Division before they solicit donations from the public. A church taking offerings is often exempt; a general nonprofit asking the public for money usually is not.

A charity must register if it receives or plans to receive more than $25,000 in total contributions in its accounting year, if it uses a professional fundraiser, or if its functions are not performed wholly by volunteers (Minnesota Attorney General, charities). The initial registration fee is $25 as of 2026, and you file before soliciting. Confirm the current fee and forms with the Charities Division, since the schedule can change.

A real exemption exists for the smallest, all-volunteer groups. A charity that does not expect to top $25,000 in contributions for the year, does not use a professional fundraiser, and performs all of its functions through unpaid persons can claim an exemption from registration — and the exemption form itself carries no fee. If your nonprofit will have paid staff or run a real fundraising campaign, plan to register; the exemption is narrow by design.

Claiming the Minnesota sales tax exemption (ST16)

Now the good news Minnesota guides bury: unlike California and several other states, Minnesota does give qualifying 501(c)(3) nonprofits a genuine sales tax exemption on their purchases. The catch is that it is not automatic. A federal determination letter exempts you from federal income tax, but it does not by itself make your Minnesota purchases tax-free — you have to apply for the state exemption separately (Minnesota Department of Revenue, qualifying for nonprofit exempt status).

To apply, you file Form ST16, Application for Nonprofit Exempt Status – Sales Tax, with the Minnesota Department of Revenue. The application asks you to show the organization is organized and operated exclusively for charitable, religious, or educational purposes, that no earnings benefit a private individual, and that it stays out of prohibited political activity. Allow about 60 days for the Department to issue a determination after you apply.

Once the exemption is approved, the mechanism for using it is Form ST3, the Certificate of Exemption. The nonprofit gives a completed, signed ST3 to each vendor at the time of purchase, and the vendor sells to the organization without charging sales tax. Keep in mind that the exemption covers the organization’s own purchases for its exempt purpose — it is not a license to buy anything for anyone tax-free, and Minnesota income tax follows your federal status rather than this sales tax application, so treat the two exemptions as separate filings.

Minnesota filing at a glance

The table below maps each step to its agency, form, and cost. Treat the fees as accurate as of 2026 and confirm with the listed agency, since Minnesota fees change.

What you’re doing	Agency	Form	Fee (as of 2026)
Incorporate the nonprofit	Minnesota Secretary of State	Articles of Incorporation (Chapter 317A)	$70 mail / $90 expedited (confirm)
Get a federal tax ID	IRS	EIN application (online)	Free
Apply for 501(c)(3) status	IRS	Form 1023 or 1023-EZ	$600 / $275 user fee
Register to fundraise	MN Attorney General, Charities Division	Charitable Organization Registration	$25 initial
Claim sales tax exemption	MN Department of Revenue	Form ST16 (then ST3 to vendors)	No fee
Federal/state income tax exemption	IRS / follows federal status	Form 1023	Per 1023 above

Setting up the books once the nonprofit exists in Minnesota

Once the entity is formed and the exemptions are filed, the work shifts from one-time paperwork to the monthly routine — and that routine is where nonprofits either hold together or quietly fall apart. A nonprofit holds money in trust for the people and purposes it serves, much of it restricted by donors or grant terms, so it tracks money by fund rather than as a single bottom line. Set the books on fund accounting before the first grant lands, keep the giving records donors need, and document that the board reviews the finances; the discipline is covered in nonprofit accounting. The Minnesota angle to keep on your calendar is the annual charities renewal — most registered nonprofits file an annual report with the Attorney General, and letting it lapse can push the registration into delinquent status.

FAQ

How much does it cost to start a nonprofit in Minnesota? The required state cost is modest. Filing Articles of Incorporation under Chapter 317A costs $70 by mail or $90 expedited as of 2026, and the Attorney General’s charitable registration is $25 — so the Minnesota paperwork runs roughly $95 to $115 plus your time. The Form ST16 sales tax exemption has no application fee. The bigger line item is federal: the IRS charges a $275 user fee for Form 1023-EZ or $600 for the full Form 1023, which is what actually makes you a 501(c)(3). A small Minnesota nonprofit can be stood up properly for a few hundred dollars once you include the federal exemption application.

Do you have to register a nonprofit with the Minnesota Attorney General? In most cases, yes. Minnesota requires a charity to register with the Attorney General’s Charities Division before soliciting if it receives or plans to receive more than $25,000 in contributions for the year, uses a professional fundraiser, or has functions not performed wholly by volunteers (Minnesota Attorney General, charities). A small, all-volunteer group under that threshold can claim an exemption with no fee. This registration is separate from incorporating with the Secretary of State and separate from your IRS 501(c)(3) application.

Does Minnesota exempt nonprofits from sales tax? Qualifying 501(c)(3) nonprofits can be exempt, but not automatically. You apply with Form ST16 to the Department of Revenue, and once approved you give vendors a completed Form ST3 to buy goods for your exempt purpose without paying sales tax. Federal tax-exempt status alone does not grant the Minnesota sales tax exemption, so file ST16 as its own step and allow about 60 days for a determination.

How long does it take to start a nonprofit in Minnesota? The Minnesota incorporation itself can be fast — expedited online or in-person filing of the Articles is processed quickly, while mailed filings take longer. The slow part is federal: the IRS can take from about a month (Form 1023-EZ) to many months (full Form 1023) to issue the 501(c)(3) determination letter, and the Department of Revenue allows about 60 days to rule on the ST16 sales tax exemption. Plan for the state entity to exist within days to a couple of weeks, but full tax-exempt status to take several months end to end.

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Vestrybooks sets up a new Minnesota nonprofit’s books on fund accounting from day one — funds, reconciliation, and the board reports — so the financial side is right before the first grant arrives. See how it works.

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