What’s the definition of related to an exempt activity?
I know of a downtown church that has a large parking ramp next door to a convention center. On Sundays, parishioners park in the ramp to attend services. The rest of the week, the church charges people to park there.
How about a school, which charges tuition, that is run by a church.
Rectories and church owned houses?
Pretty much anything that’s closely related to that organization’s stated mission as defined by their by-laws which were filed with the IRS.
That income would be taxable, since a for-profit parking lot business would hardly qualify as serving their mission. HOWEVER, you could hand out receipts to everyone stating their parking fee was actually a donation to the church, and they could get away with it without much issue. The IRS is pretty flexible on things like that.
Education is quite often associated with religious organizations, and would fall under their mission statement. Education itself is a specific category under the relevant tax code.
Again, you can make a very reasonable case that a rectory is a necessary component of the religious organization. Church-owned houses could go either way, depending on their use.
It would get messy, unless you also taxed other non-profit/charitable institutions.
For instance, our church runs a subsidized day care. Do you tax us on that? How about the food shelf?
And we already pay for some services - we got hit with a whacking big assessment when they upgraded the storm sewers on the road outside our church.
Unless you taxed all non-profits, I suspect you would run into Constitutional issues pretty shortly, what with that “separation of church and state” that was put in place to protect churches from interference by money-hungry governments.
Regards,
Shodan
Not so fast… priests and such often receive salaries…
Perhaps off-topic, but I can’t help but wonder if (at least in the case of the Catholic Church) they might attempt to declare the church and its lot consular grounds to side-step taxation.
“Hey, it’s an embassy of the Vatican.”
Not a factual post, but one that could be relevant in the hypothetical world in which we start taxing churches.
Also acknowledged that I’m a known moron in the field of taxation.
So? There are millions of employees of non-profit organizations that receive salaries as well. They all pay taxes.
It wouldn’t fly. While they can claim anything they want, they’d have to show use of the property for that purpose. Then they’d probably need to get Rome to go along with the idea and bankroll them - because they’d likely lose their tax-exempt status as a foreign body.
Ok, but it’s stupid for government to tax itself on government buildings, and most of that 1/3 is government land. Same with schools. And, many non-profits perform needed services- Red Cross, Homeless shelters etc, which if they didn’t do it, the government would.
So, that just leaves churches. So, how much of *buildable city land area * is taken up by churches.
Now, besides being centers of worship, many also perfrom vital community services. So, we’d have to take that into consideration.
The State Department decides whether a particular property has diplomatic/consular status, not the owner of the property.
And they pay income tax on them.
Not true a charitable gift is deductible only to the extent it exceeds anything received in return and the IRS insists you have a statement to that effect to take the deduction. It would be pretty easy to determine the value of the parking you received in retruns."
In truth, yes. In practicality, no. The IRS is not going to run a sting operation on a church taking donations for letting people park in their lot.