State and Federal Tax Policy toward Nonprofit Organizations

James Alm () and Daniel Teles

No 1704, Working Papers from Tulane University, Department of Economics

Abstract: State and federal tax policy in the United States generally favors nonprofit organizations, and particularly nonprofits classified as 501(c)3 nonprofit charities. This favorable tax treatment comes from two types of tax policies. First, nonprofits are exempt from paying a variety of state and federal taxes. Second, individuals are encouraged to donate to nonprofit charities through favorable policies in the federal income tax, state income taxes, and the inheritance tax. This paper presents some basic material on the tax treatment of nonprofit organizations, and then examines what we know and what we do not know about state and federal tax policy toward nonprofit organizations.

Keywords: Nonprofit organizations; 501(c)3 organizations; tax deductions; charitable donations; unrelated business income tax; tax price elasticity (search for similar items in EconPapers)
JEL-codes: H24 H31 L3 (search for similar items in EconPapers)
Date: 2017-07
New Economics Papers: this item is included in nep-agr and nep-pbe
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http://repec.tulane.edu/RePEc/pdf/tul1704.pdf First Version, Jul 2017 (application/pdf)

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Chapter: State and federal tax policy toward nonprofit organizations (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:tul:wpaper:1704

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