4 ms·
That's a little unfair. A 501(c)3 is a huge asset - not only is a 501(c)3 exempt from federal income taxes (and often state sales taxes) but people can make tax
by GabrielF00 12y ago
That's a little unfair. A 501(c)3 is a huge asset - not only is a 501(c)3 exempt from federal income taxes (and often state sales taxes) but people can make tax-deductible contributions to a 501(c)3. If two companies are producing a product and one is a 501(c)3, then that company has an enormous competitive advantage in the marketplace. Yorba is producing software that commercial software developers also produce. The IRS has a very good reason to make sure that Yorba is actually an exempt organization before it grants tax-exempt status - otherwise the government is effectively subsidizing one company in the marketplace.
- Fuxy 12y agoYes however one company builds a product to sell it or make a profit in some other way while another gives it away for free. I would argue that the OSS company is still at a disadvantage since they have to figure out how to feed the developers (pay them a decent wage) while still giving the software away for free.
- deleted 12y ago[deleted]
- danielweber 12y agoCan't they just slap ads everywhere?
- Fuxy 12y agoThat's one option however a very annoying one for their users plus if it happens to be something non standard like a Linux terminal app where do you put the ads?
- ancap 12y ago> otherwise the government is effectively subsidizing one company in the marketplace Following that logic, if I rob 4 of my 5 neighbors, I have subsidized the 1.
- gamblor956 12y agoA 501(c)(3) is still subject to federal income taxes on its business income that is not directly related to its charitable purpose (aka "unrelated business income"). IOW, there is no advantage to being a non-profit unless your business is a charitable activity.