Q&As

According to the Internal Revenue Service, a 501(c)(6) organization is a business league devoted to the improvement of business conditions of one or more lines of business. It is not engaged in any regular business typically carried on by for-profits.
Trade associations and professional associations are considered to be business leagues. The mission of a 501(c)(6) organization must focus on the advancement of the conditions of a particular trade or the interests of the community.

A 501(c)(6) business league may further its exempt purposes through lobbying as its primary activity without jeopardizing its exempt status. However, a 501(c)(6) organization that engages in lobbying may be required to either provide notice to its members regarding the percentage of dues paid that are applicable to lobbying activities, or pay a proxy tax.

Examples of 501(c)(6) organizations include the National Association of Truck Stop Operators, Home Builders Associations, and local chambers of commerce.

Learn more about 501(c)(6) organizations at the IRS Web site.

For more information, see The Nonprofit Legal Landscape in our bookstore.