Student clubs/organizations are considered a separate entity from North Dakota State University and do not fall under NDSU’s tax exempt status. Therefore, student clubs/organizations should not use NDSU’s Tax ID or presume they are tax exempt.
Student clubs/organizations are not automatically tax exempt. If tax exempt status is desired, it is the responsibility of each club/organization to file the appropriate paperwork. Clubs/organizations with national affiliation may check with their national organization to see if they fall under the national tax-exempt number. Otherwise, forms from the State of North Dakota must be filed. In addition, each organization is liable for their tax filings and tax reporting.
Departmental personnel are often asked to serve as advisors to student clubs/organizations and may be involved in assisting, or advising the club in financial matters. The club/organization may either set up an agency fund at NDSU, if approved, or may need to open a bank account, as authorized by their bylaws, officers, or advisors.
If the club/organization is approved to have their financial accounts with NDSU, the student club/organization will be set up with an NDSU agency fund. The student club/organization and their officers are responsible for any financial obligations incurred by the club/organization as well as for any overdraft in their University fund,
The establishment of a student club/organization agency fund does not place the club/organization under the University’s tax-exempt umbrella, nor does it make the University liable for any of the clubs/organization’s actions.
If the club/organization chooses to open a bank account, the banks will require that the club/organization provide a federal employer identification number in order to open a new bank account. Since the club/organization is not legally a part of the NDSU, or the state of North Dakota, the University's federal employer identification number must not be used to open a bank account. The club/organization must obtain its own federal employer identification from the Internal Revenue Service by filing form SS-4 Application for Employer Identification Number. This form is available through the IRS web site www.irs.gov .
It is advisable to maintain good internal accounting controls over receipts and, especially, disbursements from the bank account. Segregating duties or having two people involved in the transactions is advisable. In addition, requiring two signatures on checks and rotating duties can also help.