Tax Policy

Last updated September 6, 2019

Charitable nonprofits are created and operated according to federal tax law. Consequently, tax policy changes can have significant implications for the work of nonprofits. The Center advocates on several areas of tax law affecting nonprofits, including:

Nonprofit tax exemption. All 501(c)(3) nonprofits should be fully exempt from federal, state, and local taxes.

Incentives for charitable giving. Federal and state tax laws should encourage individuals and businesses to give generously to support the work of charitable nonprofits.

Nonprofit nonpartisanship. A provision in Section 501(c)(3) of the Internal Revenue Code (sometimes known as the Johnson Amendment) protects nonprofits from demands for endorsements of candidates for public office and the diversion of charitable assets to support partisan campaigns.

Sales tax policy. Changes to state sales and use tax laws can have significant implications for the operations and finances of nonprofits.

 

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