Community Associations are NOT Charitable Organizations Exempt from Ohio Sales Tax

Condominium and homeowner association board members often ask whether their community association has to pay sales tax or other taxes since the association is an Ohio non-profit corporation.  Unfortunately, community associations are not considered “charitable organizations” and therefore do not qualify as tax-exempt organizations under Section 501(C)(3) of the Internal Revenue Code.

The term charitable refers the public good or benefit and includes such causes as relief of the poor; advancement of religion, education, or science; erecting or maintaining public buildings or works; and defending human and animal rights.    Although community associations are not-for-profit corporations, their purpose is to administer and maintain private communities for the benefit of owners who pay for such maintenance.  Consequently, the term “not-for-profit” is not the same as “charitable.”  Thus, community associations do not meet the requirements for tax-exempt status of a 501(c)(3) organization.