What are the central attributes of a tax-exempt organization?

In Business Organizations by Coolidge Wall

Why does one organization pay local, state and federal income taxes, while another is exempt from such exactions?

A responsive answer to that question must focus foremost and initially on an entity’s stated and actual objectives.

Is the entity a business enterprise driven primarily — if not exclusively — by a money-making motive intended to profit its owners, managers and employees?

Or, conversely, was it established with an aim to promote one or more charitable objectives?

When many people think of tax-exempt organs, they likely think — and reasonably so — of organizations in Ohio and elsewhere that are somehow linked with religion, education or more generalized philanthropy geared toward improving the lives of others.

Government regulators have long recognized a distinction between profit-based and charitably grounded entities, with disparate tax treatment resulting as a consequence.

The bottom line: Provided a would-be tax-exempt organization satisfies all relevant requirements, it will not be required to pay taxes to either state or federal authorities.

This is notable, though, and something that we point out on our website at the long-tenured Dayton law firm of Coolidge Wall: To qualify for tax-exempt status, an entity “must meet some very specific structural requirements and a number of ongoing compliance requirements and restrictions.”

Our attorneys help with that, routinely advising diverse clients from across Ohio and elsewhere that want to reap — and maintain — the benefits of tax exemption so that they can concentrate fully on their charitable objectives.

Our firm handles all legal issues relevant to tax exemption. We welcome contacts to the firm and the opportunity to help charitable groups of all types duly qualify for tax-exempt status and, thus, better fulfill their organization’s core objectives.

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