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State and Federal Tax Policy toward Nonprofit Organizations

Listed author(s):
  • James Alm

    ()

    (Department of Economics, Tulane University)

  • Daniel Teles

    ()

    (Department of Economics, Tulane University)

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.

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File URL: http://econ.tulane.edu/RePEc/pdf/tul1704.pdf
File Function: First Version, Jul 2017
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Paper provided by Tulane University, Department of Economics in its series Working Papers with number 1704.

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Date of creation: Jul 2017
Handle: RePEc:tul:wpaper:1704
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  1. Sansing, Richard, 1998. "The Unrelated Business Income Tax, Cost Allocation, and Productive Efficiency," National Tax Journal, National Tax Association, vol. 51(n. 2), pages 291-302, June.
  2. Kimberley Scharf & Sarah Smith, 2015. "The price elasticity of charitable giving: does the form of tax relief matter?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(2), pages 330-352, April.
  3. Dean Karlan & John A. List, 2007. "Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment," American Economic Review, American Economic Association, vol. 97(5), pages 1774-1793, December.
  4. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing Charitable Giving with Rebates or Matching: Further Laboratory Evidence," Southern Economic Journal, Southern Economic Association, vol. 72(4), pages 794-807, April.
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  6. Saez, Emmanuel, 2004. "The optimal treatment of tax expenditures," Journal of Public Economics, Elsevier, vol. 88(12), pages 2657-2684, December.
  7. Daniel Teles, 2016. "Do Tax Credits Increase Charitable Giving? Evidence from Arizona and Iowa," Working Papers 1606, Tulane University, Department of Economics, revised Oct 2016.
  8. Duquette, Nicolas J., 2016. "Do tax incentives affect charitable contributions? Evidence from public charities' reported revenues," Journal of Public Economics, Elsevier, vol. 137(C), pages 51-69.
  9. Sansing, Richard, 1998. "The Unrelated Business Income Tax, Cost Allocation, and Productive Efficiency," National Tax Journal, National Tax Association, vol. 51(2), pages 291-302, June.
  10. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
  11. Diamond, Peter, 2006. "Optimal tax treatment of private contributions for public goods with and without warm glow preferences," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 897-919, May.
  12. Gulley, O. David & Santerre, Rexford E., 1993. "The Effect of Tax Exemption on the Market Share of Nonprofit Hospitals," National Tax Journal, National Tax Association, vol. 46(4), pages 477-486, December.
  13. Eckel, Catherine C. & Grossman, Philip J., 2003. "Rebate versus matching: does how we subsidize charitable contributions matter?," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 681-701, March.
  14. Bakija, Jon & Heim, Bradley T., 2011. "How Does Charitable Giving Respond to Incentives and Income? New Estimates From Panel Data," National Tax Journal, National Tax Association, vol. 64(2), pages 615-650, June.
  15. Cordes, Joseph J., 2011. "Re-Thinking the Deduction for Charitable Contributions: Evaluating the Effects of Deficit-Reduction Proposals," National Tax Journal, National Tax Association, vol. 64(4), pages 1001-1024, December.
  16. Arthur C. Brooks, 2007. "Income tax policy and charitable giving," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(3), pages 599-612.
  17. repec:eee:ecolet:v:155:y:2017:i:c:p:62-66 is not listed on IDEAS
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