Entities that are tax-exempt under Section 501c3 of the Internal Revenue Code do not have to pay income taxes, even if some of their activities compete with commercial enterprises.

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are required to pay tax at the corporate rate on the income generated from any trade or business activities unrelated to the entity's tax-exempt purposes. The purpose of this requirement is to eliminate advantages that have over profit-making organizations.

Entities That Are Tax-Exempt Under Section 501c3 of the Internal