Church Tax

[simplegospel1144]

Sometimes I think churches should be taxed. It would definitely put small ones out of business. But the end result might not be so bad. It would consolidate small groups who really are close in belief into a larger sustainable body. Wouldn't the preacher then be allowed to voice political influence? The churches could together form a stronger political voice since that is what most churches are concerned with here in America. Wonder how bad the tax would be?

 

[ForJesusChrist]

The church should stay out of politics?

And why do you want small churches out of business? I would much rather attend a small church than a large one.

God Bless

 

[simplegospel1144]

No no I dont want any church out of business. There is a lot of talk lately about big churches giving up the status to have a political voice. That voice I have to say would be strong in these times. I agree that the body doesnt belong in politics, but that is what the church in America does and who the Republican party is anyway.

 

[miamited]

Hi SB,

Perhaps you don't understand why a church qualifies for 501c3 status. 501c3 status is granted to any organization or business that does not make a profit. Taxes are paid on profit. So, even if you were to remove churches from the umbrella of the 501c3 tax status, if they are operating as they are supposed to be operating in order to be granted that status, they would still not pay any taxes.

So, it really shouldn't have any tax implications for a church if they are not granted 501c3 tax status, but they would fill out different forms each year. However, what would change is that the people who gave tithes and gifts to any church would no longer be able to deduct them as charitable contributions. So, the only ones who would be hurt by taking away the 501c3 status for churches would be the congregation and not the actual 'church' entity itself.

God bless you,
In Christ, Ted

 

[dysert]

I'm not a historian by any stretch, but I thought the point of not taxing religious entities was to ensure that religion and government don't get intermingled. After all, the Constitution says there is to be no establishment of religion by the government. Have I been mistaken all my life?

 

[jax5434]

The 501c3 is not just for income taxes though. It also exempts us from property taxes and they would be a real burden for some churches.

God Bless
Jax

 

[tturt]

http://prodigalthought.net/2011/01/26/the-average-church-size-in-america/

"So, though half of the churches in the US have 75 people of less, with 90% of the churches having 350 people or less,..."

 

[miamited]

The 501c3 is not just for income taxes though. It also exempts us from property taxes and they would be a real burden for some churches.

God Bless
Jax

Hi Jax,

I'm not absolutely sure on this because I only have what's available on line at the moment, but...

Being a 501c3 organization does not automatically exempt any business or organization from payment of property taxes. Property taxes are generally levied by a local county or city government and they have their own requirements for how such an organization may or may not be exempt from property taxes. Here's an article which appeared in the Pittsburgh Post Gazette on the subject as it applies in Pennsylvania:

A key myth is that simply because a nonprofit organization qualifies as tax-deductible (501c3) with the IRS it is exempt from paying property taxes in Pennsylvania. An agency is exempt only if it is a "purely public charity," which is stated in the Pennsylvania Constitution. To qualify as a "purely public charity" under Pennsylvania law, an organization must:

1) Advance a charitable purpose; 2) donate or render gratuitously a substantial portion of its services; 3) benefit a substantial and indefinite class of persons who are legitimate subjects of charity; 4) relieve the government of some of its burden; and 5) operate entirely free from private profit motive.



Read more: Nonprofit myths: Many don't pay property taxes -- but for many good reasons - Pittsburgh Post-Gazette

So, it would seem that while many organizations may be exempt from property taxes because of the same reasons for which they also qualify for exemption for federal corporate taxes as a 501c3 organization, it is because the lower taxing authority also uses similar guidelines as regards local property taxes. However, I think we should still understand that even if a religious organization had to pay local property taxes, it is not really the organization that would be hurt so much as it is the people who give of their time and money to help sustain them.

Anyway, as far as I am concerned, whatever the law regarding payment of taxes is, then religious organizations must follow that law. And this is not at all to say that there aren't some shady characters who use this tax exempt status in an unworthy manner, but that's between themselves, God and the government.

Also, any one employed by a tax exempt organization still must pay all federal and property taxes on their own personal income from the organization and their own homes and other taxable properties. So, the pastor himself, unless he is cooking the books and not showing any income to himself but having free use of the organization's money, would be just as much a tax cheat as anyone else who doesn't pay their fair taxes.

God bless you.
In Christ, Ted

 

[dragongunner]

I'm not a historian by any stretch, but I thought the point of not taxing religious entities was to ensure that religion and government don't get intermingled. After all, the Constitution says there is to be no establishment of religion by the government. Have I been mistaken all my life?

This means that government cannot proclaim a national religion for America. It does not mean no religion in government.

Bottom line churches are given tax exemption IF they don't talk but like 2 minutes about politics in the church. Most pastors and churches cave to the government so they don't have to be taxed.....its kinda like a bribe by the government to the church and the church takes it.


The link will help explain seperation of church and state, because it most likely will come up.

WallBuilders - Issues and Articles - The Separation of Church and State