It can be tough to figure out whether membership fees should be categorized as contributions or as gross receipts. Very generally speaking, a membership fee will be considered a non-taxable contribution if the basic purpose of the fee is to provide general support for the organization. This is true even if the nonprofit does in fact provide services, admissions to events, merchandise, or other things of value to its members, as long as these things are just incidental benefits. Remember, contributions are not taxable, whether or not your group has obtained tax-exempt status.

But if the nonprofit solicits membership fees primarily as a way to sell admissions, merchandise, services, or other tings of value to members of the general public who don't have any common interest other than wanting the admissions, merchandise, or services, then the IRS will consider the membership fees to be gross receipts. This means that they are taxable if you don't have tax-exempt status. They may well be taxable even if you do have tax-exempt status, if the IRS deems the fees unrelated ot your nonprofit purposes.

The tax rules regarding membership fees can get a lot more complicated than this. If, for instance, a nonprofit offers a subscription to its monthly newsletter to people who join and pay a membership fee, it will need to grapple with awfully nitpicky IRS rules about whether that membership fee is a contribution (money given without expectation of something in return), or gross receipts (payments in exchange for something of value). For detailed information on how membership fees should be classified, you may want to consult a nonprofit-savvy account or lawyer.

As you can see, the only type of taxation that depends on your tax-exempt status is tax on business income that's substantially related to your nonprofit purposes. Contributions and grants are never taxable, and business income that's not substantially related to your nonprofit purposes is always taxable, whether you have tax-exempt status or not.

From Starting & Building a Nonprofit, A Practical Guide (Nolo Press)