ANSWERS: 1
  • Most people think of 501(c)(3) organizations when they think of non-profits, but charities aren't the only agencies that get tax breaks for the work they do. Professional and business associations also get tax exempt status known as 501(c)(6).

    Definition

    According to BoardSource.org, 501(c)(6) organizations are professional and business organizations or groups that contribute to the advancement of business without making a profit themselves.

    Mission

    The IRS requires that all 501(c)(6) organizations focus on advancing or improving a business or trade nationally or within their community.

    Tax Status

    These organizations are given tax exempt status by the IRS, meaning they do not have to pay sales tax and are afforded other tax breaks in exchange for the positive work they do in the community.

    Special Considerations

    501(c)(6) organizations can participate in lobbying without losing their tax exempt status, but lobbying cannot be their sole purpose. These types of organizations may also charge dues and membership fees, which must be reported to the IRS.

    Examples

    Local Chamber of Commerce offices, The National Association of Truck Stop Operators, real estate boards, trade boards, medical associations and business leagues are 502(c)(6).

    Source:

    BoardSource.org: What Is a 501(c)(6) Organization?

    IRS.gov: 501(c)(6) Organizations

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