Danville-Boyle Planning and Zoning Commission members told Kilby she would have to go back to the Danville City Commission and ask for the change.
There are more than two dozen different kinds of groups that are tax exempt, but not charitable.
The city passed the sign rules Monday, but that has become part of the old ordinance written in 1988.
P&Z Director Paula Bary suggested that the rules be added to the new ordinance, which is under review now.
Bary said that to open it up to just those who are exempt from taxes, might mean a large group of people would be eligible to put up temporary signs.
Tax exempt status is commonly given to employee associations, fraternal societies, labor and agricultural organizations, political groups, social clubs, social welfare organizations and veterans' organizations.
It is also given to many others, including teachers' retirement fund associations, state and federal credit unions, cooperative hospital service organizations, child care organizations and churches.
But, not all churches have 501.C.3 status.
Local attorney Dick Murphy said that his church wasn't a 501.C.3 and wouldn't be eligible either. The IRS doesn't require churches to pay taxes, and it doesn't require them to register as 501.C.3s, and so many churches are not.
P&Z wrote the sign rules, in part, to give churches leeway in advertising times of services and vacation bible schools.
Bary said she thought the tax status would be an easy way to delineate between who should be allowed to post signs and who should not.
Jimmy Lehman warned that many charitable organizations are allowed to have Bingo games and could post signs around town advertising the games.
Commissioner Jamey Gay doubts the sign issue will be resolved soon. After the meeting, he walked out with the 2-inch thick ordinance under his arm. He said that he didn't want to see the new ordinance be held up over signs. Instead he wants to pass it, stop operating under the 1988 ordinance and talk signs later.
Kilby hopes that the sign issue is resolved before Taste of Danville this fall.