# Why are churches in the US tax exempt? **URL:** \ **Category:** Factual Questions\ **Created:** [November 3, 2008, 9:52pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931 "2008-11-03T21:52:10Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Superfluous\_Parentheses](https://avatars.discourse-cdn.com/v4/letter/s/8edcca/32.png) [@Superfluous\_Parentheses](https://boards.straightdope.com/u/Superfluous_Parentheses)\ **Post date:** [November 3, 2008, 9:52pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/1 "2008-11-03T21:52:10Z")
Or are they? I really don’t know much about this, but if you’re going to tax profits etc why would churches need the exemption? What taxes _are_ they exempt for anyway - just profits or what? Same question for non-religious charitable organizations by the way (though I’m not at all convinced churches are charitable organizations). edit: I thought I posted this in GD. If the mods feel inclined to move it there, I won’t mind. ---
**Author:** ![dolphinboy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dolphinboy/32/330_2.png) [@dolphinboy](https://boards.straightdope.com/u/dolphinboy)\ **Post date:** [November 3, 2008, 10:12pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/2 "2008-11-03T22:12:12Z")
Chruches are non-profit, and non-profits are tax exempt for the most part. ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [November 3, 2008, 10:13pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/3 "2008-11-03T22:13:16Z")
Churches are exempt from property and business taxes because it was traditionally thought that taxing their revenues would violate the First Amendment provision against restricting freedom of religion. Their charitable activities are not taxed because they are charitable (that is, the church does not realize a profit from them.) Employees of churches and other charitable organizations have to pay regular income taxes. However, some churches do have profit-making divisions. For example, a church could open a coffee shop. Those businesses have to pay the same taxes any other business would. ---
**Author:** ![Paul\_in\_Qatar](https://avatars.discourse-cdn.com/v4/letter/p/ccd318/32.png) [@Paul\_in\_Qatar](https://boards.straightdope.com/u/Paul_in_Qatar)\ **Post date:** [November 3, 2008, 10:17pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/4 "2008-11-03T22:17:20Z")
It is simply an American custom. Other nations that have no state religions have different systems. Churches in Mexico are owned by the State. In France too, IIRC. ---
**Author:** ![johnspartan](https://avatars.discourse-cdn.com/v4/letter/j/a183cd/32.png) [@johnspartan](https://boards.straightdope.com/u/johnspartan)\ **Post date:** [November 3, 2008, 10:17pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/5 "2008-11-03T22:17:30Z")
because, in the words of Chief Justice John Marshall, “The power to tax involves the power to destroy”. ---
**Author:** ![OldGuy](https://avatars.discourse-cdn.com/v4/letter/o/3bc359/32.png) [@OldGuy](https://boards.straightdope.com/u/OldGuy)\ **Post date:** [November 3, 2008, 11:12pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/6 "2008-11-03T23:12:26Z")
It’s always bothered me that the tax exemption of a church seems to require that the government define what a church is – which would seem to be unconstitutional. Is it true that churches are tax exempt simply because they’re non-profit? Are all non-profit organizations exempt from property tax – even a non-profit (private) golf course for example? ---
**Author:** ![Markxxx](https://avatars.discourse-cdn.com/v4/letter/m/5daacb/32.png) [@Markxxx](https://boards.straightdope.com/u/Markxxx)\ **Post date:** [November 3, 2008, 11:20pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/7 "2008-11-03T23:20:44Z")
> [@OldGuy](#): > > Is it true that churches are tax exempt simply because they’re non-profit? As a prior poster noted, churches are tax exempt because it was reasoned by the courts that to tax them would interfer with their first amendment right to exercise their religion. The term church is an umbrella term that covers, mosques, temples or even Native American sites, so long as the organization meets minimum criteria set forth by the IRS to be tax exempt. ---
**Author:** ![Superfluous\_Parentheses](https://avatars.discourse-cdn.com/v4/letter/s/8edcca/32.png) [@Superfluous\_Parentheses](https://boards.straightdope.com/u/Superfluous_Parentheses)\ **Post date:** [November 3, 2008, 11:28pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/8 "2008-11-03T23:28:28Z")
> [@dolphinboy](#): > > Chruches are non-profit, and non-profits are tax exempt for the most part. So why, if churches are non-profit, would it matter if their profits would be taxed? Assume I’m 12 years old and don’t know anything about US taxes etc. > [@Markxxx](#): > > As a prior poster noted, churches are tax exempt because it was reasoned by the courts that to tax them would interfer with their first amendment right to exercise their religion. > > The term church is an umbrella term that covers, mosques, temples or even Native American sites, so long as the organization meets minimum criteria set forth by the IRS to be tax exempt. But doesn’t that mean that any corporation qualifying as a church can basically do whatever they like and not pay taxes. Assume I’m 12 years old and don’t know anything about US taxes etc. Again ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [November 3, 2008, 11:37pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/9 "2008-11-03T23:37:37Z")
> [@OldGuy](#): > > Are all non-profit organizations exempt from property tax – even a non-profit (private) golf course for example? Generally yes, although property tax exemptions may vary by state. Here is a blog [post](http://www.wheremostneeded.org/2006/11/charities_gain_.html) contending that the biggest beneficiaries of this rule are universities and hospitals. > [@Superfluous\_Parentheses](#): > > So why, if churches are non-profit, would it matter if their profits would be taxed? Taxes, for purposes of this question, are not imposed upon “profit” as such, but upon income and upon property. A non-profit has income, it just chooses to use that income for charitable purposes. This is as opposed to a profit-making corporation, which would (in a broad oversimplification) distribute that income to its shareholders. And property owned by a non-profit has value, regardless of its owner’s non-profit status. So we could tax most charities (although churches would pose certain 1st Amendment problems, as others have noted); we just opt not to. ---
**Author:** ![Yllaria](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yllaria/32/3452_2.png) [@Yllaria](https://boards.straightdope.com/u/Yllaria)\ **Post date:** [November 3, 2008, 11:47pm UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/10 "2008-11-03T23:47:21Z")
> [@Markxxx](#): > > . . . meets minimum criteria set forth by the IRS to be tax exempt. Would it be a quick wiki or google to chase up what those criteria are? I’ve heard that Jesus and his diciples wouldn’t have qualified. ---
**Author:** ![Superfluous\_Parentheses](https://avatars.discourse-cdn.com/v4/letter/s/8edcca/32.png) [@Superfluous\_Parentheses](https://boards.straightdope.com/u/Superfluous_Parentheses)\ **Post date:** [November 4, 2008, 12:44am UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/11 "2008-11-04T00:44:32Z")
> [@Tom\_Tildrum](#): > > Taxes, for purposes of this question, are not imposed upon “profit” as such, but upon income and upon property. A non-profit has income, it just chooses to use that income for charitable purposes. This is as opposed to a profit-making corporation, which would (in a broad oversimplification) distribute that income to its shareholders. > > And property owned by a non-profit has value, regardless of its owner’s non-profit status. Ok, so where does the income go for churches and why would it not be taxed? I’m thinking of sales tax etc. I really don’t see why _profit_ wouldn’t/shouldn’t be taxed. > [@](#): > > So we could tax most charities (although churches would pose certain 1st Amendment problems, as others have noted); we just opt not to. I don’t see why taxing churches would involve the 1st amendment. ---
**Author:** ![Clothahump](https://avatars.discourse-cdn.com/v4/letter/c/51bf81/32.png) [@Clothahump](https://boards.straightdope.com/u/Clothahump)\ **Post date:** [November 4, 2008, 12:50am UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/12 "2008-11-04T00:50:36Z")
Churches are businesses and should be taxed like any other business. ---
**Author:** ![Superfluous\_Parentheses](https://avatars.discourse-cdn.com/v4/letter/s/8edcca/32.png) [@Superfluous\_Parentheses](https://boards.straightdope.com/u/Superfluous_Parentheses)\ **Post date:** [November 4, 2008, 1:02am UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/13 "2008-11-04T01:02:59Z")
> [@Clothahump](#): > > Churches are businesses and should be taxed like any other business. I broadly agree - but the question is: “why aren’t they?” ---
**Author:** ![Superfluous\_Parentheses](https://avatars.discourse-cdn.com/v4/letter/s/8edcca/32.png) [@Superfluous\_Parentheses](https://boards.straightdope.com/u/Superfluous_Parentheses)\ **Post date:** [November 4, 2008, 1:12am UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/14 "2008-11-04T01:12:22Z")
> [@kunilou](#): > > Churches are exempt from property and business taxes because it was traditionally thought that taxing their revenues would violate the First Amendment provision against restricting freedom of religion. Their charitable activities are not taxed because they are charitable (that is, the church does not realize a profit from them.) Ok, I can see why their charitable activities aren’t taxed. So what are property, business and revenue taxes in this respect? I’m a european and I don’t know the details of the US tax system. ---
**Author:** ![Lumpy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lumpy/32/446_2.png) [@Lumpy](https://boards.straightdope.com/u/Lumpy)\ **Post date:** [November 4, 2008, 1:58am UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/15 "2008-11-04T01:58:11Z")
It’s probably a holdover from the bitter Catholic-Protestant struggles in England. Remember that back in the day taxation was primarily taxation on property (i.e. land, and the buildings on it.) Discriminatory taxes were a favorite dirty trick to carry out what amounted to confiscation by the state, especially if the Official Church was government-owned and tax exempt. It’s part and parcel with the list of things that the Constitution forbids the US government to do (such as bills of attainder) simply because they had such an infamous history of abuse. ---
**Author:** ![Thudlow\_Boink](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thudlow_boink/32/320_2.png) [@Thudlow\_Boink](https://boards.straightdope.com/u/Thudlow_Boink)\ **Post date:** [November 4, 2008, 2:10am UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/16 "2008-11-04T02:10:13Z")
[Previous thread, which contains links to previouser threads](http://boards.straightdope.com/sdmb/showthread.php?t=474419) ---
**Author:** ![Caveat\_lector\_1](https://avatars.discourse-cdn.com/v4/letter/c/ea5d25/32.png) [@Caveat\_lector\_1](https://boards.straightdope.com/u/Caveat_lector_1)\ **Post date:** [November 4, 2008, 2:12am UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/17 "2008-11-04T02:12:04Z")
I posted this in the other similar thread and I’m not one to waste a good link so: [http://www.irs.gov/pub/irs-pdf/p1828.pdf](http://www.irs.gov/pub/irs-pdf/p1828.pdf) _warning bigish pdf_ This is an IRS document on the tax exempt status of churches. Some relevant parts are: > [@](#): > > Churches and religious organizations, like many other charitable organizations, qualify for exemption from federal income tax under IRC section 501(c)(3) and are generally eligible to receive tax-deductible contributions. To qualify for tax-exempt status, such an organization must meet the following requirements (covered in greater detail throughout this publication): > ■ > the organization must be organized and operated exclusively for religious, educational, scientific, or other charitable purposes, > ■ > net earnings may not inure to the benefit of any private individual or shareholder, > ■ > no substantial part of its activity may be attempting to influence legislation, > ■ > the organization may not intervene in political campaigns, and > ■ > the organization’s purposes and activities may not be illegal or violate fundamental public policy. And here is the definition of church (bolding mine): > [@](#): > > Church. Certain characteristics are generally attributed to churches. These attributes of a church have been developed by the IRS and by court decisions. **They include: distinct legal existence; recognized creed and form of worship; definite and distinct ecclesiastical government; formal code of doctrine and discipline; distinct religious history; membership not associated with any other church or denomination; organization of ordained ministers; ordained ministers selected after completing prescribed courses of study; literature of its own; established places of worship; regular congregations; regular religious services; Sunday schools for the religious instruction of the young; schools for the preparation of its ministers. The IRS generally uses a combination of these characteristics, together with other facts and circumstances, to determine whether an organization is considered a church for federal tax purposes.** > The IRS makes no attempt to evaluate the content of whatever doctrine a particular organization claims is religious, provided the particular beliefs of the organization are truly and sincerely held by those professing them and the practices and rites associated with the organization’s belief or creed are not illegal or contrary to clearly defined public policy. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [November 4, 2008, 2:32am UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/18 "2008-11-04T02:32:54Z")
A church’s tax exempt status means Their income can not be taxed. That means the donations from the members is not taxed and the members can deduct from their income the amount that they have donated. The church does not have to fill out profit loss forms. If a church does own a business there aree limits on that business. A small coffie shop’s income is not taxed. If the church owns a large business it may be taxed. ---
**Author:** ![Collaborator](https://avatars.discourse-cdn.com/v4/letter/c/3ec8ea/32.png) [@Collaborator](https://boards.straightdope.com/u/Collaborator)\ **Post date:** [November 4, 2008, 2:55am UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/19 "2008-11-04T02:55:34Z")
If you want a good case study, look into the long battle the IRS fought with Scientology on this very issue. Pretty much highlighted every little flaw there is with the tax laws and making your own religion. ---
**Author:** ![yabob](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yabob/32/2821_2.png) [@yabob](https://boards.straightdope.com/u/yabob)\ **Post date:** [November 4, 2008, 3:33am UTC](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931/20 "2008-11-04T03:33:19Z")
Keep in mind that churches and charitable organizations are a subset of a much broader category of non-profit organizations which are not taxed. The IRS lists 28 types of 501(c) nonprofits: > **[501(c) organization | Types](https://en.wikipedia.org/wiki/501(c)#Types)** > > According to the IRS Publication 557, in the Organization Reference Chart section, the following is an exact list of 501(c) organization types and their corresponding descriptions.\[a\] That’s a pretty diverse list, able to encompass advocacy organizations such as AARP, MoveOn or the NRA, as well as fraternal lodges, various co-op setups, business leagues, labor unions and many other things. Taken in that context, churches being tax exempt does not seem like such a horrible violation of principals. [Next page](https://boards.straightdope.com/t/why-are-churches-in-the-us-tax-exempt/470931.md?page=2)