Are PACs subject to federal income tax?

PACs are not required to pay federal income tax on exempt function income, which typically includes funding sources along the lines of campaign contributions, membership fees and fundraising event proceeds. In most cases, only investment income and business income of a PAC are subject to tax.

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Ben Palkowski is an attorney and CPA who focuses his practice on business consulting, with emphasis upon tax and campaign finance. Ben previously worked as an attorney and lobbyist at a large northern New England law firm representing Fortune 500 corporations and trade associations. Prior to that, Ben worked as a legislative director for a state employee labor union and in numerous positions in political organizations. Learn more about Ben and his services at or