Tennessee Modifies Charitable Organization Audit Threshold
Published April 24, 2024

Tennessee Modifies Charitable Organization Audit Threshold

Tennessee Gov. Bill Lee recently signed legislation increasing the annual gross revenue threshold mandating a financial statement audit for Tennessee charitable organizations. Existing law requires certain charitable organizations with operations within Tennessee to file an annual report with the secretary of state. In the past, charitable organizations that received gross revenue exceeding $500,000 during their most recently completed fiscal year had to include audited financial statements with this annual report, among other requirements. The new legislation, Tennessee House Bill No. 1708, increases the gross revenue threshold to $1 million before audited financial statements must be filed.

Tennessee law defines a charitable organization as that which “holds itself out to be a benevolent, educational, voluntary health, philanthropic, humane, patriotic, religious or eleemosynary organization, or for the benefit of law enforcement personnel, firefighters, or other persons who protect the public safety, or any person who solicits or obtains contributions solicited from the public for charitable purposes.”

The definition of gross revenue, for purposes of the newly implemented $1 million threshold, excludes grants received from government agencies and private foundations designated by the Internal Revenue Service as 501(c)(3) organizations.

Additional changes brought about by House Bill No. 1708 include the reduction of registration fees for charitable organizations intending to solicit contributions from or within Tennessee. Fees for organizations initially registering during the period July 1, 2024, to June 30, 2025, will be lowered to $10, compared to the current $50 fee. Also, through June 30, 2024, the registration renewal fee is $10. The new legislation extends the registration renewal fee rate of $10 until June 30, 2025.

What the New Legislation Means to You

Tennessee House Bill 1708 means charitable organizations in Tennessee with eligible annual gross revenues between $500,000 and $1 million no longer need to submit audited financial statements with each registration or renewal to the secretary of state.

If you have questions about how the legislative changes might impact your organization, contact our executives via email or by calling (800) 270-9629.

Learn more about PYA’s audit and assurance services.

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