A nonprofit business is a business whose owners do not receive distributions of profits—and any money remaining after payment of the business’s expenses must be retained and used for its own expenses and for charitable purposes. Nonprofit businesses are often charitable foundations and exempt from federal income tax under Internal Revenue Code section 501(c)(3). A tax-exempt 501(c)(3) is a charitable organization that is formed for religious, charitable, educational, literary, artistic, or scientific purposes, or for preventing cruelty to animals and children, fostering amateur sports competition (locally and internationally), or testing for public safety. These charitable organizations are distinct from not-for-profit social or recreational clubs that may be exempt from federal income taxation if they meet the requirements of Internal Revenue Code section 501(c)(7).

In Wyoming, a nonprofit business is designed to operate without distributing profits to its owners. Instead, any surplus funds after expenses are to be reinvested into the organization's operations or used for its charitable purposes. Nonprofits in Wyoming may include charitable foundations and, if they meet certain criteria, can be exempt from federal income tax under Internal Revenue Code section 501(c)(3). To qualify for this exemption, the organization must be established for one or more of the following purposes: religious, charitable, educational, literary, artistic, scientific, prevention of cruelty to animals or children, fostering amateur sports competition, or testing for public safety. It's important to note that this tax-exempt status is distinct from that of social or recreational clubs, which may be exempt under section 501(c)(7) if they fulfill specific requirements. To maintain tax-exempt status, a 501(c)(3) organization in Wyoming must adhere to state statutes governing nonprofits as well as comply with federal regulations, including limitations on political activities and requirements for public disclosure of financial information.