Legal Question in Business Law in Maryland

Yes. Why, not?

You ask a question that really involves several different areas of law. First, an organization will be organized under the laws of a particular state as some type of entity (likely a non-stock corporation). The laws of that state will specify certain things about the make-up of the entity as will the governing documents (by-laws). Certain types of organizations (like a domestic corporation with a subchapter S tax classification) may be prevented from having foreign OWNERS or stockholders. The Board of Directors is different than the stockholders/owners, though, and a non-profit doesn't have stockholders/owners the way a typical for-profit corporation does.

Secondly, an entity can be recognized as tax-exempt by the IRS. (A non-profit does not NEED to get this recognition to exist but usually does to get tax benefits). To get this status the entity needs to show certain things like the make-up of its board. The involvement of the board may well impact the running of the entity although board members can live anywhere.