Jeff,
There are two great articles from the PTO Today magazine that you need to read. One deals with to incorporate or not and the other is about federal tax exemption. I believe you will find them in the archive section. There are pros and cons to incorporation and tax exemption these articles do a great job of covering them.
Tax exemption comes from the IRS and if that is approved the state normally recognizes it, again it is a state by state issue, but I am pretty sure that WI follows that form. That said though state tax exemption does not mean you are exempt from paying all state taxes, Ohio as we have found out has some (IMHO) rather strange laws on this about its sales tax.
Typically the process used for all this follows this type of form (subject to state laws of course):
1. Create the organization - Articles of Incorporation (if you incorporate) and/or articles of organization. These can be one and the same and you can choose to organize and not incorporate and then later down the road incorporate. You need to be familar with the state and federal laws when creating the documents.
2. File for a Federal Employee Identification number. This is your organizations Social Security number used to identify you to the IRS.
3. Obtain the forms to file for 501(c)(3) status.
4. Complete the application (1023) for non profit status. There are a couple of decissions to be made here on how to file so read publication 557 carefully to know which applies to you.
5. File the 1023 the date you send it in starts a clock for you. Once you recieve your letter approving your organization as a non profit you are, if you have to resubmit because of insufficient information do so promptly - remember that clock that started? You will be able to go back and everything you did fromt hat date to the date of approval provided it falls within that clock will be as a non profit. But you may not act as a non profit until the IRS says you are so dont represent yourself as such until that time.
6. There may be post state filing requirements to complete state requirements most states want you to tell them that you are now an approved non profit organization.
7. Always file your 990 each year even if you do not hit the minimums required for filing once you are an approved non profit. Otherwise you may find yourself dropped off without your knowing it and you will have to refile.
Exception to all this is contained in Publication 557 - if your organization has gross reciepts under 5,000 a year.
That is a quick veiw of the process again you will have to ceck the state requirements because it will affect some of the language you use in your organizing document. Once you get publication 557 and have a few hours to spend reading it you will understand more of what I am talking about here.
What I meant by not rushing is non of this has to be done next week. Take your time and understand all that is involved and get as many people involved as you can, it will go much easier with help.
When we wrote our new Charter of Organization I had one person trying to rush it through. If we had done what they wanted to do we would have had it finished in a month and it would have been worse than having nothing at all. As it is we took 3 months writting. changing, modifying, thnking, arguing, tearing our hair out reading a lot of law - then once the committee was happy it was presented to the board which made a couple of minor modifications after more than 2 hours of debate. A month later it was presented to the general membership in a very formal meeting for an up or down vote. Because the committee did its homework, becaise the board spent the time debating, and because we had a lot of people who cared, the membership approved in without a single nay vote. It is a lot of work, but it is work that has to be clearly thought out and you and many other people are going to become experts in a lot of areas I bet you never thought for a second you would ever need to be