Texas Form Ap 206 PDF Details

Understanding the Texas Ap 206 form is crucial for any homeowners' association looking to obtain an exemption from Texas franchise tax. Designed specifically for nonprofit corporations that operate as homeowners' associations, this application caters to associations seeking relief from franchise taxes, a benefit strictly applicable to franchise tax reports due after May 1, 1982. The eligibility criteria are quite specific: the association must be involved primarily in acquiring, managing, constructing, and maintaining property within a residential condominium or real estate development restricted legally for residential use. Importantly, these properties must not engage in commercial activities, ensuring that the residential essence is maintained. Moreover, a significant control aspect is that individual resident owners must hold over 51% of the voting power in the association. This homeowners' association exemption, as outlined in Section 171.082 of the Texas Tax Code, is part of a broader spectrum of tax laws in Texas, including exemptions from sales and franchise taxes for organizations that align with certain Internal Revenue Code sections. However, entities should note that being exempt from state taxes does not extend to hotel occupancy taxes, as these are governed by separate regulations. Submitted applications undergo a review process, where additional information may be requested, and the comptroller reserves the right to audit to verify exempt status. Overall, the Texas Ap 206 form serves as a gateway for eligible homeowners' associations to navigate the complexities of tax exemption while emphasizing the importance of compliance and accountability in maintaining their exempt status.

QuestionAnswer
Form NameTexas Form Ap 206
Form Length4 pages
Fillable?No
Fillable fields0
Avg. time to fill out1 min
Other namesap 206 form ap206

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APPLICATION FOR EXEMPTION — HOMEOWNERS’ASSOCIATION

SUSAN COMBS • TEXAS COMPTROLLER OF PUBLIC ACCOUNTS

A nonprofit corporation that is a homeowners’ association should use this application to request exemption from Texas franchise tax. The homeowners’ association exemption extends only to franchise tax and is applicable to franchise tax reports due on or after May 1, 1982.

To receive a state franchise tax exemption as a homeowners’ association, the association must be a nonprofit corporation organized and operated primarily to obtain, manage, construct and maintain the property in or of a residential condominium or residential real estate development that is legally restricted for use as residences. The property cannot be used for any commercial activity. Additionally, the individual resident owners of the lots, residences or residential units must have at least 51% voting control of the association.

The exemption for a homeowners’ association is provided for in Section 171.082, Texas Tax Code, and more detailed information is available in Franchise Tax Rule 3.541.

Texas tax law provides an exemption from sales tax on goods and services purchased for use by organizations exempt under Section 501(c)(3), (4), (8), (10) or (19), Internal Revenue Code (IRC). However, exempt organizations are required to collect tax on most of their sales of taxable items. See Exempt Organizations, Sales and Purchases, Publication 96-122.

Texas law also provides an exemption from franchise taxes for corporations exempted from the federal income tax under IRC Section 501(c)(2), (3), (4), (5), (6), (7), (8), (10), (16), (19) or (25).

If your organization has been granted federal tax exemption under one of the qualifying sections listed above, your organization will be granted an exemption from Texas franchise tax, or sales and franchise tax, on the basis of the Internal Revenue Service (IRS) exemption, as required by state law. Organizations that qualify for state tax exemption based on the federal exemption are not exempt from hotel occupancy tax because the hotel occupancy tax law does not recognize any federal exemptions.

The laws, rules and other information about exemptions are online at:

http://window.state.tx.us/taxinfo/exempt

Send the completed application along with all required documentation to:

Comptroller of Public Accounts

Exempt Organizations Section

P.O. Box 13528

Austin, Texas 78711-3528

We will contact you within 10 working days after receipt of your application to let you know the status of your application. We may require an organization to furnish additional information to establish the claimed exemption. After a review of the material, we will inform the organization in writing if it qualifies for exemption. The comptroller or an authorized representative of the comptroller may audit the records of an organization at any time during regular business hours to verify the validity of the organization’s exempt status.

If you have questions or need more information, contact our Tax Assistance staff at 1-800-252-5555 or, in Austin, call 463-4600.

You have certain rights under Chapters 552 and 559, Government Code, to review, request, and correct information we have on file about you. Contact us at the address or toll-free number listed on this form.

AP-206-1 (Rev.1-07/4)

AP-206-2 (Rev.1-07/4)

SPECIFIC INSTRUCTIONS

Item 1. The filed document of record, and any subsequent amendments, that establishes the purpose of the property usually provides the qualifications for association membership, owners’ voting rights and whether the property is held exclusively for residential use. This document and the plat map are filed with the local county clerk’s office, and may be referred to as the:

•Declaration;

•Deed Restrictions;

•Covenants, Conditions and Restrictions, or similar titles.

To complete Item 1, take the language directly from the appropriate controlling document, which is normally the Articles of Incorporation but may be the association’s Declaration or Bylaws. Also, specify in Item 1 the title of the document and the specific citation from which the language was taken.

Item 2. To be eligible for exemption as a homeowners’ association, the property must be residential and have no commercial property within the real estate development. A condominium project or real estate development is considered residential if the property is legally restricted for use as residences, with no commercial use allowed.

To complete Item 2, enter the total number of lots/units as shown on the plat map for the real estate development. The plat map should be on file with the local county clerk’s office.

Item 3. To complete Item 3, enter the total number of lots/units owned by the individual resident owners. Do not include any lots/units owned by the declarants, developers, builders, banks, investors or similar parties. Do not include multiple-owned lots by an individual owner, unless an exception applies. An exception occurs when an individual owner purchases two lots to construct a single residential structure; in that case, the adjacent lot would be considered as being owned by the individual resident owner, and the lot should be included in the total reported in Item 3.

Item 4. To complete Item 4, enter the total number of lots not included in Item 3. Include multiple- owned lots by an individual owner, and all lots/units owned by parties other than the individual resident owners. Attach a list identifying these owners and the number of lots owned.

In order to qualify for exemption as a homeowners’ association, these parties cannot control more than 49% of the association’s total votes. Majority control cannot be held by a single individual or family, or by one or more developers, declarants, banks, investors or similar parties.

Item 5. If the answer to number 5 is yes, also complete Items 5a and 5c. If the answer to number 5 is no, also complete Items 5b and 5c. For 5a, 5b and 5c, take the language directly from the controlling documents. If the language is not found in the declaration, then look for it in the Articles of Incorporation or bylaws. Also, provide the title of the document from which the language was taken.

AP-206-3

 

 

 

(Rev.1-07/4)

 

 

 

TEXAS APPLICATION FOR STATE TAX EXEMPTION

 

• TYPE OR PRINT

 

 

 

FOR HOMEOWNERS’ ASSOCIATIONS

 

• Do NOT write in shaded areas.

Page 1

PLEASE COMPLETE THE FOLLOWING INFORMATION

1.SEE INSTRUCTIONS The primary purpose of the corporation as quoted directly from the association's Articles of Incorporation, Declaration, or Bylaws, including any subsequent amendments, is

as found in

(Title of document and cite from which the language was taken)

2. SEE INSTRUCTIONS Number of lots/units shown on the plat map for the real estate development ..........

3. SEE INSTRUCTIONS Number of residential lots/units owned by individual owner .....................................

4.SEE INSTRUCTIONS Number of lots/units units owned by declarant, developers, builders,

banks, investors, or other similar parties .....................................................................................................

Items 3 and 4 must equal the total reported in Item 2.

....................................5. SEE INSTRUCTIONS Does the Declaration provide for different classes of votes?

YES

 

 

 

If YES, must complete 5a and 5c. If NO, must complete 5b and 5c.

5a. Enter the voting rights for each class of member, as found in:

NO

(Title of document and cite from which the language was taken)

CLASS A:

CLASS B:

(List additional classes if necessary)

5b. Enter the language that identifies the number of votes each member is entitled to, including the declarant’s voting rights.

Title of document and cite from which 5b was taken:

5c. List conditions that determine when the Declarant’s voting rights ceased, or converted to other conditions allowing the individual owners to gain voting control of the association.

Title of document and cite from which 5c was taken:

6. Based on the information provided above, the date the individual resident owners

Month Day Year

 

 

 

 

 

 

 

 

 

 

 

 

 

collectively gained voting control (at least 51 percent) of the association was:

 

 

 

 

 

 

 

 

 

 

 

 

 

7.Corporation name (For Texas corporations, name must match the official corporate name as on file with the Texas Secretary of State. For out-of-state corporations, name must match the official corporate name as filed in the home state of charter)

(CONTINUED ON BACK SIDE)

AP-206-4 (Rev.1-07/4)

TEXAS APPLICATION FOR STATE TAX EXEMPTION

FOR HOMEOWNERS’ ASSOCIATIONS

• TYPE OR PRINT

 

• Do NOT write in shaded areas.

Page 2

8.

Name, address and daytime phone number of person submitting this application

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

 

 

Title

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Firm or Company Name

 

 

 

 

 

Daytime Phone (Area code and number)

 

Extension

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address

 

City

 

 

 

 

 

 

 

State

 

Zip

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9.

Texas taxpayer number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.

Federal employers identification number (if applicable)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11.For TEXAS corporations, filing information issued by the Secretary of State:

Month Day Year

File Number ............................................

File Date ...................................

12. For NON-TEXAS corporations, filing information issued by the Texas Secretary of State:

Month Day Year

Certificate of Authority File Number ..........

File Date ...................................

Home State

 

Date of

Month Day Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

of Incorporation

 

Incorporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home State Filing

or Registration Number

I, _____________________________________________ , ________________________________________________

(Name)(Title)

of ________________________________________________________________________________________ , affirm

(Corporation Name)

the homeowner's association is a nonprofit corporation.

I further state that the corporation is organized and operated primarily to obtain, manage, construct, and maintain property in or of a residential condominium or residential real estate development.

The corporation will maintain proof that the condominium project or real estate development is legally restricted for use as residences, with no commercial use allowed, and will also maintain proof that the collective resident owners of individual lots, residences, or units control at least 51 percent of the votes of the corporation.

___________________________________________________ DATE _________________________________

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1. The Texas Form Ap 206 needs particular details to be typed in. Ensure the next blank fields are complete:

Stage number 1 of completing Texas Form Ap 206

2. After the previous section is finished, you need to add the essential details in List additional classes if, b Enter the language that, voting rights, Title of document and cite from, c List conditions that determine, allowing the individual owners to, Title of document and cite from, Based on the information provided, Month Day Year, and collectively gained voting control so you're able to proceed to the next part.

Texas Form Ap 206 conclusion process outlined (step 2)

It's very easy to make an error when filling in your Title of document and cite from, so be sure to take another look prior to when you submit it.

3. This next section is fairly straightforward, Corporation name For Texas, and CONTINUED ON BACK SIDE - each one of these empty fields will need to be completed here.

A way to fill out Texas Form Ap 206 part 3

4. It's time to begin working on this next section! In this case you have all of these Name address and daytime phone, Name, Title, Firm or Company Name, Daytime Phone Area code and number, Extension, Address, City, State, Zip, Texas taxpayer number, Federal employers identification, For TEXAS corporations filing, File Number, and File Date blanks to fill out.

Step no. 4 of filling out Texas Form Ap 206

5. To conclude your form, this last section requires a couple of extra blanks. Filling out Name, Title, of affirm, Corporation Name, the homeowners association is a, I further state that the, The corporation will maintain, and DATE should conclude everything and you can be done very fast!

Texas Form Ap 206 completion process detailed (portion 5)

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