style=”text-decoration: none”> What is the difference between nonprofit and tax-exempt status?
Nonprofit status is a state law concept. It recognizes an organization as nonprofit organization and the nonprofit status may make an organization eligible for certain benefits, such as state sales, property, and income tax exemptions, but must pay federal taxes if does not have tax exempt status. To qualify as exempt from federal income taxes, an organization must meet requirements set forth in the Internal Revenue Code. Tax-exempt status generally means that the nonprofit organization is not liable for federal or state income tax on its net income (with certain exceptions). Organizing as a nonprofit organization at the state level does not automatically grant the organization exemption from federal income tax. On the other hand just because an organization is exempt from paying federal corporate income tax on income generated from activities that are substantially related to the purposes for which the entity was organized (and for which the organization received tax-exempt status) it
