Are nonprofits required to pay taxes?
In South Carolina, nonprofit organizations are not required to pay taxes on income they receive as long as it is used exclusively for charitable, educational, or religious purposes. However, nonprofit organizations must pay taxes on any income that they earn from activities that are unrelated to their mission. This is known as unrelated business income. Nonprofit organizations may also be required to pay state and local taxes on goods and services they purchase. For example, a nonprofit organization may have to pay sales tax when purchasing items for their staff or office supplies. In addition, nonprofit organizations may need to pay taxes on certain real estate investments or when hiring employees. The taxes may be state or federal income taxes, as well as Social Security and Medicare taxes. Overall, nonprofit organizations in South Carolina are exempt from taxation on income they receive as long as it is used exclusively for charitable, educational, or religious purposes. However, it is important for them to be aware of their tax responsibilities when engaging in other activities.
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