Tax Exemption for Churches

[Oberon]

If a church runs a for profit business they are required to pay tax on that I believe.

Yes, and they also have to pay property taxes on land they aren't currently using as well; they can't just sit on vacant land they own for future use and expansion without paying taxes on it either, until they actually use it for something. Most businesses operated by a church are incorporated as separate entities anyway. Salvation Army and Goodwill type stores still have to collect sales taxes and the like. Ministers and pastors will also get banged if they use church vehicles and the like for personal use, as that is considered a comp. There is a grey area when it comes to parsonages and houses churches provide some of their employees, as well as pastors, as well. There is no Big Giant Free Ride, contrary to the imaginings running wild out in the Fever Swamps.

 

[countryboy]

I think most non profits other than churches do pay property taxes. I think they all should.

Not trying to argue the point, but it's simply not true. Do Nonprofit Organizations Pay Property Taxes? | Chron.com

Organizations that qualify for federal tax-exempt status are, by law, exempt from paying property taxes in all 50 states.

 

[Hari Seldon]

Not trying to argue the point, but it's simply not true. Do Nonprofit Organizations Pay Property Taxes? | Chron.com

I guess you are correct. I came across this though:

Property taxes

Probably the most common type of local tax exemption for nonprofits is from property taxes, which may apply to office equipment, automobiles and other "personal" property as well as to real estate. Usually the property has to be directly used in the activities that qualify for nonprofit status; property that is owned and rented out for commercial purposes probably is taxed just like the buildings up the street. Frequently there is an application that must be filed to claim property tax exemption and either a renewal process or spot checks by revenue agents to be sure the use of the property hasn't been changed in a way that makes it ineligible.

Increasingly, cash-strapped local governments are seeking PILOTs ("payments in lieu of taxes") from nonprofits, especially from large institutions and especially in cities where the tax-base is limited because of the number and size of tax-exempt organizations (both nonprofits and governments). Arrangements for PILOTs may be negotiated, and some large institutions agree to pay them because they accept the argument that they, and their employees and clients, benefit from the municipality's services. In other cases, the negotiations can be difficult and result in bad feelings, or worse, affecting community morale.

 

[countryboy]

I guess you are correct. I came across this though:

Property taxes

Probably the most common type of local tax exemption for nonprofits is from property taxes, which may apply to office equipment, automobiles and other "personal" property as well as to real estate. Usually the property has to be directly used in the activities that qualify for nonprofit status; property that is owned and rented out for commercial purposes probably is taxed just like the buildings up the street. Frequently there is an application that must be filed to claim property tax exemption and either a renewal process or spot checks by revenue agents to be sure the use of the property hasn't been changed in a way that makes it ineligible.

Increasingly, cash-strapped local governments are seeking PILOTs ("payments in lieu of taxes") from nonprofits, especially from large institutions and especially in cities where the tax-base is limited because of the number and size of tax-exempt organizations (both nonprofits and governments). Arrangements for PILOTs may be negotiated, and some large institutions agree to pay them because they accept the argument that they, and their employees and clients, benefit from the municipality's services. In other cases, the negotiations can be difficult and result in bad feelings, or worse, affecting community morale.

Right, this is true. My church runs a very small "for profit" daycare. They probably have to pay property taxes on a pro-rated basis for that portion of the church. They also have to pass health inspections and any other government mandated requirements. I actually had to install a small stainless steel sink in the church kitchen, because state law mandates you cannot wash your hands in the same sink you wash dishes in.

 

[chromium]

As long as they don't try to interfere in secular law, and they don't build structures for personal use on this tax free land, they should not pay taxes, because church and state are to remain separate. Similarly i don't believe land on reservations (for what it's worth) is subject to tax

However, since very few churches seem to follow these very clear and fair terms, those that do not should definitely lose their exempt status

 

[chromium]

Actually, I believe the vast majority of non profits do not pay property taxes. Would you force all non profits to pay property taxes, or just churches?

Define non profit. Cause i think if a pastor is living it up off the collection plate, or a televangelist bringing in millions, that is in no way non profit

 

[TurtleDude]

I have mixed feelings about this because in the town where I live-once farmland and now big bucks suburbia where some land is 100K an acre, I see several of these non-attached non denominational churches spring up, buy20-50 acres of land before it became very expensive-put these big church-mansions on them. You wonder where the money comes from and cynically, I figure in 20-30 years the "church" will sell this land for a huge profit and someone will be getting big bucks without paying property taxes for that 20 year period

on the other hand, there are old non-for profit clubs or schools in Cincinnati sitting on 100 acres of incredibly valuable property not paying property taxes but at least in those cases,they cater to people who are paying huge amounts of income and property taxes

and I don't have a problem with say Saint Xavier church in downtown cincinnati not paying taxes on what is now a valuable piece of commercial real estate given that this Jesuit church has been there for over 100 years

 

[Oberon]

However, since very few churches seem to follow these very clear and fair terms, those that do not should definitely lose their exempt status

Which ones aren't following the terms laid out by the Bill of Rights? I'm not saying there aren't any; several have named specific candidates for office, but they've been taken to court for that, and lost, so most avoid that, most avoided it prior to those cases in fact. The recent attempt by some lesbian Mayor in Houston to subpoena some churches' records as a form of government interference blew up in her face, at all levels, for instance.

 

[Oberon]

I have mixed feelings about this because in the town where I live-once farmland and now big bucks suburbia where some land is 100K an acre, I see several of these non-attached non denominational churches spring up, buy20-50 acres of land before it became very expensive-put these big church-mansions on them. You wonder where the money comes from and cynically, I figure in 20-30 years the "church" will sell this land for a huge profit and someone will be getting big bucks without paying property taxes for that 20 year period

With non-profits that take tax deductible donations that won't happen. The proceeds go for paying off any debts first, then they get distributed to 501c3 orgs or other churches; no assets may be distributed to remaining members as far as I can tell. Those that incorporate will usually include clauses in their charters on how to dispose of any assets if the church were to fail. If they sell as a church, and are just moving to another location, then yes there may be a 'profit' but no individual is going to pocket any of it, at least not legally. I suppose the original Founders can be reimbursed for buying the original land, but if they claimed a tax deduction on it then they wouldn't be reimbursed.

 

[RabidAlpaca]

As a land owner in San Antonio who pays a substantial amount of $$ in property taxes, I am perplexed why I should subsidize religious organizations thru my property taxes. I live quite close to downtown, a location where there are many large Churches, some with pay as you go parking lots, childcare centers, and restaurants. These Churches sit on large lots with multiple buildings. and I for one feel like as a property tax payer my rights (separation of Church and State) are being violated by subsidizing there tax exempt status. Churches use local and community services, they should pay up like the rest of us. Opinions? Please lets not bash anyone religion, that's not the intent, a sane rational discussion of why the Federal government allows this free ride would be cool.

Tax exemptions | First Amendment Center ? news, commentary, analysis on free speech, press, religion, assembly, petition

Pope Francis Calls for Ending Tax-Exempt Status of Churches That Don't Help the Needy

I've never understood this either. Churches are businesses that make profits like any other. The Catholic Church ceo lives in a big golden Palace in Rome, and many of the mega churches in Texas have made their "clergy" mega millionaires with private jets.

Maybe you should declare your house a praise Jesus zone so you can cheat your way out of paying your fair share.

 

[ludin]

I've never understood this either. Churches are businesses that make profits like any other. The Catholic Church ceo lives in a big golden Palace in Rome, and many of the mega churches in Texas have made their "clergy" mega millionaires with private jets.

Maybe you should declare your house a praise Jesus zone so you can cheat your way out of paying your fair share.

churches are not allowed to make profit as they are non-profit organizations.
you really don't know what you are talking about.

that is why those mega church got in trouble with the IRS at one point as well.

 

[RabidAlpaca]

churches are not allowed to make profit as they are non-profit organizations.
you really don't know what you are talking about.

The Catholic Church makes billions, the clergy live off of tithes, televangelists pocket millions. If I start my own business to feed my family I get taxed like a normal citizen. If a pastor does the same exact thing he's exempt because he funnels all of his money through the church.

Don't for one second pretend these people aren't profiting. A church is a business just like any other and you shouldn't get exempted from taxes just because you slap a Jesus label on it.

 

[ludin]

The Catholic Church makes billions, the clergy live off of tithes, televangelists pocket millions. If I start my own business to feed my family I get taxed like a normal citizen. If a pastor does the same exact thing he's exempt because he funnels all of his money through the church.

Nope pastors still have to pay taxes on their personal income only the church is tax excempt you don't know what you are talking about.

Don't for one second pretend these people aren't profiting. A church is a business just like any other and you shouldn't get exempted from taxes just because you slap a Jesus label on it.

you saying it well is your opinion. church are non-profit organizations and therefore must follow all the same guidelines as any other non-profit organization.
your bigotry is showing.

 

[Crovax]

It's really simply IMO. In no way shape or form should a church or any other rebellious org be exempt from taxes or get any other break simply because they are a church or a religious org. The rules should apply to them just like everybody else. If they file for a non-profit or some other exemption that anybody or any optimization can apply for then so be it but it should have nothing to do with religion. There's really no reason to make them a special case in regard to taxes.

Other than the 1st amendment but who really cares about that anyways

 

[ludin]

Define non profit. Cause i think if a pastor is living it up off the collection plate, or a televangelist bringing in millions, that is in no way non profit

yet pastors have to pay taxes on their income just like anyone else.

 

[Oberon]

Define non profit. Cause i think if a pastor is living it up off the collection plate, or a televangelist bringing in millions, that is in no way non profit

The pastor of the largest mega-church in the country doesn't take a dime from the collection plate. He does indeed bring in millions; it comes from people like Time Warner books and other publishers who pay him $12-$13 million up front for the publishing rights for his next book and other deals. The same for most other mega-churches. The vast majority of churches' pastors work outside jobs, as plumbers, small store owners, company employees, etc., etc. You don't have any idea of what you're talking about here.

 

[RabidAlpaca]

Nope pastors still have to pay taxes on their personal income only the church is tax excempt you don't know what you are talking about.



you saying it well is your opinion. church are non-profit organizations and therefore must follow all the same guidelines as any other non-profit organization.
your bigotry is showing.

You have pastors with big mansions and private jets from profits of their churches, and that's a "non-profit"? Silly kids.

 

[ludin]

You have pastors with big mansions and private jets from profits of their churches, and that's a "non-profit"? Silly kids.

prove it is profit.
I don't think you undertand what the word profit means.

profit is gross income - expenses.

that is like the basic accounting right here.
you just want to throw the word profit around like it means something else and it doesn't.

 

[Oberon]

You have pastors with big mansions and private jets from profits of their churches, and that's a "non-profit"? Silly kids.

So what? And again the church has no profit, and of course you don't have idea of any of those pastors' sources of income. so you're just blowing wind. And they pay income taxes on that income as well.

 

[Andalublue]

question?..... then why am i and others to subsidize people on welfare, and other government social programs.

Because Jesus told you to take care of the poor?

 

[CLAX1911]

There are two good reasons why churches and other organizations are tax exempt. Non profit organizations are considered a social benefit. They operate did pantries for the hungry, or soup kitchens, and various beneficial youth activities.

Also churches are exempt from taxes as well as other non profits because taxing them would involve government entanglement.

I'm sure if an individual was so inclined to open a food pantry for the needy, or provide wholesome programs for the community, that individual would easily qualify as a 501(c) Charity and thus be tax exempt.

Basically put, churches and other charities are exempt because they provide beneficial services that help the community.

Rather you share their beliefs or not, they do have ministries that feed the hungry and clothe the naked. Some even provide social help to anybody in need.

I do believe churches and other religious and non religious charities should be audited, to make sure they actually do perform some beneficial service to the community, but I don't think it's necessary or even a good idea to begin placing these burdens on non profit organizations.

 

[joG]

As a land owner in San Antonio who pays a substantial amount of $$ in property taxes, I am perplexed why I should subsidize religious organizations thru my property taxes. I live quite close to downtown, a location where there are many large Churches, some with pay as you go parking lots, childcare centers, and restaurants. These Churches sit on large lots with multiple buildings. and I for one feel like as a property tax payer my rights (separation of Church and State) are being violated by subsidizing there tax exempt status. Churches use local and community services, they should pay up like the rest of us. Opinions? Please lets not bash anyone religion, that's not the intent, a sane rational discussion of why the Federal government allows this free ride would be cool.

Tax exemptions | First Amendment Center ? news, commentary, analysis on free speech, press, religion, assembly, petition

Pope Francis Calls for Ending Tax-Exempt Status of Churches That Don't Help the Needy

I guess, you could remove "free exercise thereof". That would also take care of the renitent bakers and magistrates quite neatly.

 

[joG]

Because Jesus told you to take care of the poor?

Jesus? I thought that was socialists.

 

[CLAX1911]

prove it is profit.
I don't think you undertand what the word profit means.

profit is gross income - expenses.

that is like the basic accounting right here.
you just want to throw the word profit around like it means something else and it doesn't.

I don't agree with placing tax burdens on churches. Many of them are nearly able to keep the lights on, yet they still provide food for the poor and clothing for the needy. And this is supported completely by the parishioners. Churches are largely a good thing for their community, regardless of how I feel about their beliefs.

That being said, some on the other hand do take advantage of their tax exempt status. I don't have anything against churches, religion may not agree with me, but I recognize their value. Can you recognize an issue with a "church" who's sole pastor is a billionaire with no income outside if the "church" collection?

That doesn't seem like an issue to you? Even if you are a member of a religion, you can criticize others for lesser practice and actions of faith, can you not?

 

[Andalublue]

Jesus? I thought that was socialists.

Same thing.