Internal Revenue Code Classification for the AAMA and AAMA Affiliates

I received the following question from an AAMA state society leader:

Is our state society eligible for the reduced [transaction] rate from PayPal? The reduction in the rate is considerable and would help our society.

To answer this question, note the following information from PayPal:

PayPal offers discounted transaction rates for confirmed 501(c)(3) charities for most products with no monthly fees. [Emphasis added.]

The American Association of Medical Assistants® (AAMA) and its affiliated state societies and local chapters are classified under 501(c)(6)—not 501(c)(3)—of the Internal Revenue Code. Section 501(c)(6) includes professional societies, business leagues, and trade associations. Section 501(c)(3) includes religious, philanthropic, and scientific entities.

Because AAMA state societies are not 501(c)(3) charitable organizations, they are not eligible for the PayPal discounted transaction rates. The AAMA and its state and local affiliates are also not eligible for state and local sales tax exemptions.

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