Because regardless of religious affiliation or non-affiliation, they’re still a nonprofit organization.
By this argument, taxing any organization that engages in publishing, media, journalism, entertainment, broadcasting, etc., is a restraint on the free exercise of speech and the press. But clearly that can’t be true.
I am not sure there is any Constitutional reason why Churches must be exempt from property tax. As my cite shows, they are not exempt from property transfer tax. As Moriah sez, they are only exempt from Property taxes on land “in use”.
Is it simply a local law? Now, yes, non-profits are exempt from most income taxes, but as has been shown, that’s because their income would likely be exempt anyway, and they in theory have no profit on which to pay taxes.
Indeed. I think a Free Exercise claim would only arise if religious institutions were somehow taxed more heavily than other non-profit organizations.
Some interesting sites on the issue:
http://www.opposingviews.com/arguments/churches-are-tax-exempt-as-a-matter-of-constitutional-right
But there’s different rights involved. The Constitution says that the government cannot abridge freedom of the press and cannot prohibit the free exercise of a religion. So the Court could rule that normal taxation does not qualify as an abridgment but it does qualify as a prohibition of free exercise and therefore media companies can be taxed but religious institutions cannot.
IANAL but I worked as a layman for a churchbody for many years.
First, let me explain that a churchbody is an organizing function which many individual congregations fund to do a variety of tasks for them–coordinate foreign missions, establish and monitor seminaries, etc, etc.
The tax free status for congregations (the local church) and churchbody related institutions (hospitals, colleges, seminaries, etc.) is set out in section 501 © of the federal tax code. As are the tax free status regulations for non-church non-profit colleges, hospitals, etc.
The exemption is a statutory, not constitutional, provision.
Let me give a few examples of the real life situation:
All employees of a congregation are subject to federal income tax. The congregation can determine an expense account, which is not taxed, for its employees. There is a long time provision that a congregation will not be taxed for the house it provides for a pastor. Current law allows that if a congregation does not provide housing for its pastor, the pastor can deduct a “housing allowance” from his or her income. All can be legislatively changed at the federal level, and in any state.
In real life, any non-profit that is smart makes voluntary contributions to a city or town’s fire department, or general fund, for police and fire protection. In many cases I know that amounts annually to the hundreds of thousand of dollars.
Years ago, for-profit companies complained that non-profits were taking advantage of their tax status. For instance, church hospitals with huge laundry facilities were also laundering restaurant napkins and tablecloths for the “outside income.” They could undercut the prices of for-profit laundries. Obviously the for-profits complained, and most of the non-profits quit the practice, or allowed that revenue to be taxed.
For many years, by the way, golf country clubs got large tax deductions because of their alleged environmental benefits to the community. My understanding is that that is no longer the case.
The issue at hand is whether there are organizations that deserve non-taxable status because of the good they do in the community without seeking profit. (The notion here is that unless folks voluntarily give me money I have no other way to do what I want to do.) That is a legislative question, not a constitutional one, at least so far, in the US.
So write your Congressperson.