Do churches in the U.S. have tax-exempt status, beyond that of other nonprofits?

[BrainGlutton]

This thread in GD – “Should Churches Who Campaign For Bush Lose Their Non-Profit Status?” – http://boards.straightdope.com/sdmb/showthread.php?t=264624 – got me to wondering: Just what is the tax status of churches in America? I mean, “everybody knows” churches don’t pay taxes – but is this because they are churches, or are they just favored with the same tax-exempt status of non-profit organizations generally? Also, is the situation the same for different levels of taxation? Are churches exempt from city and county property tax? State sales tax? Federal income tax?

And if churches do have a tax-exempt status not enjoyed by other non-profits – how do they square that with the First Amendment?

[BobT]

This is from the Annotated United States Constitution from the GPO

Tax Exemptions of Religious Property.–Every State and the
District of Columbia provide for tax exemptions for religious
institutions, and the history of such exemptions goes back to the time
of our establishment as a polity. The only expression by a Supreme Court
Justice prior to 1970 was by Justice Brennan, who deemed tax exemptions
constitutional because the benefit conferred was incidental to the
religious character of the institutions concerned.\131\ Then, in 1970, a
nearly unanimous Court sustained a state exemption from real or personal
property taxation of ``property used exclusively for religious,
educational or charitable purposes’’ owned by a corporation or
association which was conducted exclusively for
one or more of these purposes and did not operate for profit.\132\ The
first prong of a two-prong argument saw the Court adopting Justice
Brennan’s rationale. Using the secular purpose and effect test, Chief
Justice Burger noted that the purpose of the exemption was not to single
out churches for special favor; instead, the exemption applied to a
broad category of associations having many common features and all
dedicated to social betterment. Thus, churches as well as museums,
hospitals, libraries, charitable organizations, professional
associations, and the like, all non-profit, and all having a beneficial
and stabilizing influence in community life, were to be encouraged by
being treated specially in the tax laws. The primary effect of the
exemptions was not to aid religion; the primary effect was secular and
any assistance to religion was merely incidental.\133\

You can find a lot of cites of cases here http://www.gpoaccess.gov/constitution/html/amdt1.html

[astorian]

While this isn’t directly relevant to the OP, I’ll mention it anyway.

Churches are not exempt from all taxes, and being an authentically ordained clergyman doesn’t carry any special tax benefits.

If a Catholic diocese has a small chapel sitting on 100 acres of land, ONLY the land on which the chapel sits is tax-exempt. THe rest of the land is taxed like any other real estate.

And if a minister is paid a salary by his church, he pays income tax on that salary as any other paid employee would. Similarly, Reverend Reggie White had to pay income tax on his paycheck from the Green Bay Packers, Father Andrew Greeley pays taxes on the royalties to his books, and Rabbi (seriously!) Jackie Mason pays taxes on the money he gets for his standup act.

I mention this because many people DON’T grasp this fact, and some get caught up in scams, as a result. On a regular basis, people send away for mail-order ordination certificates from Universal Life Church (or some similar outfit), then declare that they don’t have to pay taxes on the income from their regular jobs, oand don’t have to pay property taxes on their homes.

Such folk always find out the hard way that clergy status, real or bogus, does NOT automatically or necessarily entitle them to any special tax breaks.

[TeaElle]

@astorian

Such folk always find out the hard way that clergy status, real or bogus, does NOT automatically or necessarily entitle them to any special tax breaks.

To make matters even more interesting, in some denominations and circumstances, clergy – even those who are “assigned” to or are permanent pastoral staff members at one church for years and years – are deemed to independent contractors for tax purposes, which means that they are responsible for an even greater measure of tax compliance than those who are “regular” employees of a company or organization.