While many cities collect income taxes that are separate from and in addition to state and federal taxes, New York City taxes are notoriously complicated and burdensome -- not only re-taxing corporate business profits, but also collecting taxes from otherwise untaxed entities like LLCs, partnerships, and sole proprietorships.

Unincorporated Business Tax (New York City and Washington, D.C.)

New York City:

These are the general steps you need to follow in order to form a nonprofit corporation in compliance with local, state, and federal laws. For information specific to your state, please see State Law: Forming a Nonprofit Corporation.

Surprisingly, there is no legal definition of a nonprofit organization. In general, a nonprofit organization is one that is organized to achieve a purpose other than generating profit. Despite this, a nonprofit organization is not precluded from making a profit or engaging in profit-making activities. It is prohibited from passing along any profits to those individuals who control it, like founders, directors, officers, employees, and members. Nothing, however, prevents a nonprofit from paying reasonable salaries to officers, employees, and others who perform a service for it.