UNDER Section 30(E) of the Tax Code, nonstock corporation or association organized and operated exclusively for religious, charitable, scientific, athletic or cultural purposes, or for the rehabilitation of veterans are exempt from income tax as long as no part of its net income or asset shall belong to or inure to the benefit of any member, organizer, officer or any specific person.
However, the last paragraph of the Section 30 likewise provides that the income of whatever kind and character of the foregoing organizations from any of their properties, real or personal, or from any of their activities conducted for profit regardless of the disposition made of such income, shall be subject to income tax. A corporation will be considered as having failed to meet the test if substantial parts of its operation are considered "activities conducted for profit."
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