> David rather belligerently said:
>
> Citation please? I have never heard this before in any other forum
> (and I deal with a number of not-for-profit groups.)
>
> Not to mention that your comment is absurd on its face; are charities
> going to find their non-profit tax status in jeopardy because their
> income comes from 'non-members'??
>
I can't cite the code, but I talked to the regional IRS office a few years
ago when our local Triumph club started building up a balance in their
account.
Point is that charities are different from not-for-profit participatory
organizations. Charities raise money to give it away. not-for-profits simply
engage in a common activity using their own money.
In order to be tax exempt the purpose of the not-for-profit participatory
organization must be to engage in some common activity as members.
Essentially the idea is that point of your organization is to do something
together at YOUR OWN COST. When you allow non-members to participate you
are essentially charging them to underwrite your activity. If you get
significant amounts of revenue from outside your membership then you are not
following the rules. If you are providing a service to non-members and
charging money doing it then you are taxable.
On the other hand, when I talked about a club with $7,000 in the bank and
annual revenue of about $5,000 they said not to worry about it. But most
SCCA regions bring in a bit more revenue than that.
State tax is different, but I don't remember what the details were, just
that we felt that here in Ohio we were ok with a not-for-profit business
license. That gets us away from sales tax and income tax didn't seem to be
an issue as long as the feds were happy.
jim
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