Section 48-7-25. Exempt corporations and organizations; procedure for obtaining exempt status; revocation of exempt status; grounds; retroactivity; statute of limitations; information returns; unrelated business income; deductibility of death benefit payments

   (a) The following organizations shall be exempt from taxation imposed by Code Section 48-7-21 as indicated:

   (1) Subject to subsections (b) and (c) of this Code section, those organizations which are exempt from federal income taxation pursuant to Section 501(c), 501(d), 501(e), 664, or 401 of the Internal Revenue Code of 1986 shall be deemed to have similar exempt status for purposes of Code Section 48-7-21; and

   (2) Insurance companies which pay to the state a tax upon premium income.

(b) (1) An organization's exempt status under paragraph (1) of subsection (a) of this Code section shall be subject to review and revocation by the commissioner in accordance with the provisions of paragraph (2) of this subsection.

   (2) (A) The commissioner may revoke the exempt status of any organization described in paragraph (1) of subsection (a) of this Code section when:

         (i) The Internal Revenue Service revokes the exempt status of the organization;

         (ii) The organization ceases to be organized or operated in the manner in which it was organized or operated at the time the exempt status was granted;

         (iii) The organization engages in any prohibited transaction as set forth in the Internal Revenue Code of 1986; or

         (iv) There is any material change in the character or purpose of the organization or in the mode of operation of the organization.

      (B) Revocation of an exempt status shall revoke the exempt status retroactively to the time of the occurrence of the disqualifying event or events. All exempt organizations shall immediately notify the commissioner in writing of the occurrence of any of the disqualifying events described in subparagraph (A) of this paragraph or of receipt by the organization of a notice of intent to terminate its exempt status by the Internal Revenue Service. The statute of limitations governing the assessment of any taxes determined to be due this state due to the revocation of exempt status shall be tolled as of the date of the occurrence of the disqualifying event or events described in subparagraph (A) of this paragraph. The commissioner at any time may require an organization which is exempt from taxation to file an information return stating the organization's gross income, receipts, disbursements, accumulation of income, and other data deemed necessary for the proper administration of this Code section.
   (c)(1) A tax is imposed on income of an organization exempted pursuant to paragraph (1) of subsection (a) of this Code section when the income is derived from trade or business which is not related to exempt purposes of organizations described in paragraph (1) of subsection (a) of this Code section. This income shall be referred to as unrelated business income and shall be the income which is defined in Section 512 of the Internal Revenue Code of 1986. The tax imposed on unrelated business income shall be at the rate provided in Code Section 48-7-21.

   (2) If an organization is exempt under Section 501(c)(4) of the United States Internal Revenue Code of 1986, if the organization makes payments of death benefits as a result of the death of a member of the organization, and if payments have been made by the organization for at least five years prior to January 1, 1977, the payments shall be deductible from the unrelated business income tax which might be owed by the organization. The payment of such death benefits shall not operate to generate a rebate or a refund. If the amount of death benefits paid within the taxable year exceeds the unrelated business income tax owed for the same taxable year, the excess may be carried forward for a period of five years.

Ga. L. 1931, Ex. Sess., p. 24, § 5; Code 1933, § 92-3105; Ga. L. 1937, p. 109, § 5; Ga. L. 1943, p. 320, § 1; Ga. L. 1950, p. 75, § 1; Ga. L. 1952, p. 273, § 3; Ga. L. 1955, Ex. Sess., p. 27, § 7; Ga. L. 1960, p. 249, § 1; Ga. L. 1961, p. 180, § 1; Ga. L. 1973, p. 924, § 3; Ga. L. 1975, p. 154, § 2; Ga. L. 1976, p. 405, § 9; Ga. L. 1976, p. 613, § 1; Ga. L. 1977, p. 1133, § 1; Code 1933, § 91A-3605, enacted by Ga. L. 1978, p. 309, § 2; Ga. L. 1979, p. 5, § 65; Ga. L. 1983, p. 1350, § 12; Ga. L. 1987, p. 191, § 2; Ga. L. 1988, p. 13, § 48; Ga. L. 2008, p. 898, § 5/HB 1151.