It is possible to form a Nonprofit in any of the 50 states, as well as the District of Columbia. Many new Nonprofits do not realize that it is possible to form their organization in a state other than the one in which they live or operate. However, through a process called “foreign qualification”, it is possible and often advisable.
If your Nonprofit operates only in a small area, it may be advisable to file within your state. The main reason for this is that states may require Nonprofits that foreign qualify to pay additional taxes and fees which can be a financial burden for the organization. There are also some logistical issues that are related to foreign qualification that may cause additional expenses.
If your Nonprofit is large or operates on a large geographical scale, foreign qualification may be the best option. Each state has different tax and filing requirements so it may be advantageous for your company to foreign qualify.