Not for Profit organizations do not earn profits for its owners. All the earned money is donated to the not for profit organization that pursues the organization’s objectives. These organizations are typically charities or other types of public welfare organizations. They are not exempt from taxation but can apply for tax-exempt status. Donations made to these tax-exempt, not for profit organizations may be tax-deductible for the donor
One thing to note here is that these organizations do not pay sales or property taxes. For example, if a church is established as a, not for profit organization it will not pay property tax. It is accepts clothing as donations and sells it to use the money for the charitable purpose it will not pay property tax even if it’s using the church as a store. However, they have to pay taxes on the payroll of their employees