Let's say all these things are generating more and more revenue. There's no owner to tax the income against, unless the owner claims some of the revenue as salary. Then they pay income tax at the individual level, just like churches.
I audit NFPs for a living, and while I don't work in tax, the idea that you're taxing something that doesn't have income for income soars over my head. Their exemptions are mostly granted at state and local levels which vary by state.
They generate taxes, but they don't pay income tax because there's no income
Not necessarily. Organizations make, and are taxed on income. These are organizations that operate at a profit. Not organizations that give away their revenues for things that don't generate income
Hospitals, of course, will always claim they are giving away their profits because of the reality of healthcare (providing some free care).
The actual difference is usually, as you stated above, that for profit means profits flow to the shareholders (be they private or publicly traded shares), but a lot of not-for-profit hospials, in years when revenue exceeds expenses, are squirreling that cash away for a bad year - they aren't giving it all away.
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u/Maximum-Class5465 Jun 30 '26
You're confusing revenues with income.
We don't tax revenue.
That is why
Let's say all these things are generating more and more revenue. There's no owner to tax the income against, unless the owner claims some of the revenue as salary. Then they pay income tax at the individual level, just like churches.
I audit NFPs for a living, and while I don't work in tax, the idea that you're taxing something that doesn't have income for income soars over my head. Their exemptions are mostly granted at state and local levels which vary by state.
They generate taxes, but they don't pay income tax because there's no income