An event hosting business leased a building from Holy Rosary Church, which came with a “morals clause” in the contract forbidding any LGBT-type events in the venue. Which it seems worked for a while, until they had to turn down a group called PFLAG in order to honor the terms of the lease.
Naturally, PFLAG raised a public shitstorm, the host relented, apologized and accommodated their event, and the lease was broken by the church.
Now the out-of-business hosting company is suing the church for a bunch of money, and the law is somewhat unclear on whether the morals clause was in fact legally valid.
Part of the claim is for the property tax on the building, which the tenant was on the hook for. It seems as though churches can make money off property that they do not have to pay tax on, but a business leasing that property has to pick up the tab for taxes. Which seems to me to be a fucked up situation.
Churches owning property that is used for commercial purposes is inappropriate. I feel that churches should not be involved in business at all and still be allowed to call themselves churches. I do not believe that the concept of religious freedom was never meant to be abused in this way, and this shit just has to stop.
That’s a good question. My opinion is that as long as churches aren’t distorting markets too badly I’m fine with the status quo. How much do they own now and how much power does that give them?
The debate is “what is reasonable?” Churches get tax breaks (which may or may not be part of the debate) because they are not businesses and because, in theory, they add value to the community (primarily in the form of a place to socialize, IMHO, because the mythological nonsense is of that valuable). When they cross the line into the actual marketplace, I see that as pushing past the principle of religion – the fact that they have been doing this for centuries/millennia does not count as justification.
Precedent does matter. Can you imagine how little would get done if everything was always argued with no regards to traditions or precedent? Has the balance of power in society tilted to great in the direction of religion? From what I see that isn’t the case.
Page 24: Rental income
Generally, income derived from the rental of real property and incidental personal property is excluded from unrelated business income. However, there are certain situations in which rental income may be unrelated business taxable income:
• if a church rents out property on which there is debt outstanding (for example, a mortgage note), the rental income may constitute unrelated debt-financed income subject to UBIT. (However, if a church or convention or association of churches acquires debt-financed land and intends to use it for exempt purposes within 15 years of the time of acquisition, then income from the rental of the land may not constitute unrelated business income.)
• if personal services are rendered in connection with the rental, then the income may be unrelated business taxable income.
That said, here’s the argument for it. Churches and other religious entities do a great deal of good in the community, and in the world at large. they provide everything from musical training to marital counseling to food for the needy and fund raising for other charities. Traditionally, in the USA they have been the chief civilizing influence. As a result, schools and other actual community resources have mostly neglected those functions.
All religious institutions have memberships that fluctuate with the times. They can not continue to do their good work when times are hard if they have to use only currently donated funds. And the times when donations are low are the times when their good work is most needed by the community.
Therefore, it is to the benefit of the entire community that they be allowed to invest and build a foundation upon which to stand financially in difficult times. Draining those funds with taxes, when the institutions themselves do such a great job of allocating them where needed int he community, makes no sense at all.
To which I say: codswallop! These institutions benefit their own members first and foremost, sending only the barest excess out into the community. And we have seen the growth of “Megachurches” whose holding are so vast that the amount benefiting the public is infinitesimal in comparison.
Let them produce a tax return and defend their deductions like everybody else.
As far as 501’s, it is easier for a church to justify its favored tax status than other charitable organizations, due to it being for religious use. If I try to do the same things as a church, but for secular purposes, it is much harder, and I don’t think you get all the same breaks anyway.
And, IMO, just as a church should, if a secular 501(c)(3) organization opened a commercial property and rented it out, it too should be subject to taxes and public accomodation laws.
Assuming that’s true (I don’t know that it is, but I wouldn’t be surprised if it was), should churches not be tax exempt or should the rules be tightened up so they are treated the same as all other such organizations?
I think that tax exemption should only go to charity and outreach efforts.
If I get a group together, buy a property, and we collectively hire some motivational speakers to make us feel better about ourselves, then go play a pick up game in the gym while our kids play on the playground outside and a big brunch is prepared in the commercial kitchen, justifying that all of that should be tax free is difficult at best.
If I do the same thing and call it religion, it’s pretty much automatic.
So, if a church donates money to a poverty reduction charity, then it should get to write that off. If it operates a food pantry or homeless shelter itself, it should be able to write it off. Same as if a secular group or individual can.
It is the non-charitable expenses, the stuff that only benefits those who attend the church that I see no reason to leave tax free.
ETA: As an example, near my home, there is a church that has a fenced in playground with “No Trespassing” signs up around it. That playground is not benefiting my community, and yet I am subsidizing it because they don’t pay taxes on it.
I really want to make another sign that says “As we forgive those who trespass against us” and put that under the “No Trespassing” sign.
I’m all for equal treatment, but that seems like it’s going to far. Should I be able to go to the offices of the Sierra Club whenever I feel like it, use their restrooms and generally just hang out there? Or should I be bale to store my RV in their parking lot? I would draw the line between profit and non-profit and leave it at that.
If they have restrooms on tax exempt property available for members (not employees) of the Sierra Club, then yes, you should. If they allow members to park their RV’s on tax exempt parking lots, then you should be able to as well. IMHO, of course.