Tax-exempt organizations are subsidized relative to taxable organizations because income related to furthering their core mission is excluded from income tax. The value of this subsidy is unclear. There is no government-provided estimate, and the tax benefit for any organization depends on the organization’s activities. Using samples of administrative data on tax-exempt organizations, we estimate the tax expenditure associated with federal income tax exemption for organizations exempt under Sections 501(c)3 to 501(c)8 of the Internal Revenue Code. In 2018, we estimate the value of income tax exemption for these sectors was $21.2 billion. Most organizations do not benefit from tax-exemption because they produce no income. Hospitals and health systems, which earn profit from providing patient care, benefit the most from tax exemption, followed by institutions with endowment income that is not disbursed furthering exempt causes, and certain other large organizations that derive income from the services they provide.