# Why is money taken in by a "church" tax free? **URL:** \ **Category:** Factual Questions\ **Created:** [December 28, 2002, 3:43am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296 "2002-12-28T03:43:01Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Cubsfan](https://avatars.discourse-cdn.com/v4/letter/c/f4b2a3/32.png) [@Cubsfan](https://boards.straightdope.com/u/Cubsfan)\ **Post date:** [December 28, 2002, 3:43am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/1 "2002-12-28T03:43:01Z")
What is it exactly that makes churches special when it comes to taxes? It is obvious that alot of churches have some pretty high payrolls based on the cars and houses that most of the pastors/preachers/evengalists that I know have. I understand that legally they are tax exempt, but my question is WHY are they tax exempt? Are churches really “non-profit” groups? Based on my26 years on this earth my opinion is that churches should NOT be treated any different than any other business, but I am looking for factual answers to this question, if possible. If this thread takes a turn out of GQ then so be it, I just want to hear what others have to say on this subject ---
**Author:** ![Reeder](https://avatars.discourse-cdn.com/v4/letter/r/c6cbf5/32.png) [@Reeder](https://boards.straightdope.com/u/Reeder)\ **Post date:** [December 28, 2002, 4:10am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/2 "2002-12-28T04:10:50Z")
SOCAS. ---
**Author:** ![Diceman](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Diceman](https://boards.straightdope.com/u/Diceman)\ **Post date:** [December 28, 2002, 4:29am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/3 "2002-12-28T04:29:35Z")
> [@](#): > > It is obvious that alot of churches have some pretty high payrolls based on the cars and houses that most of the pastors/preachers/evengalists that I know have. You must live in a pretty rich neighborhood. Drive through a low-income area and you’ll see plenty of churches that obviously don’t make any kind of profit. ---
**Author:** ![astro](https://avatars.discourse-cdn.com/v4/letter/a/9dc877/32.png) [@astro](https://boards.straightdope.com/u/astro)\ **Post date:** [December 28, 2002, 4:31am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/4 "2002-12-28T04:31:03Z")
[Churches and Taxes](http://se1.com/ft/ftorg/nlscs/ARTICLES/ChurTax24_25.html) > [@](#): > > In 1970 the U.S. Supreme Court ruled, in Walz v. Tax Commission, that church property tax exemptions do not violate the First Amendment. The Court held that tax exemptions do not amount to establishment and that applying property taxes to churches might well create more entanglement between religion and government than would tax exemption. It is important to note that while the Court ruled that church tax exemption is not unconstitutional, it did not rule that exemption is always mandated by the First Amendment. > > Since 1970 there has been a slight tightening of tax exemption policy. Federal tax reforms in the 1980s diluted the deductibility of tax deductions for religious and charitable donations. In 1989 the Supreme Court allowed Texas to apply the state sales tax to sales of Bibles, while in January 1990 the Court ruled unanimously that the First Amendment did not protect Jimmy Swaggart’s religious enterprise from California sales and use taxes on religious material and other goods sold in-state either at rallies or by mail. > > Thus the Supreme Court has left the door open for a tightening of church tax exemption policy, which should be good news for federal, state, and local governments faced with deficits and unmet social needs. ---
**Author:** ![Cubsfan](https://avatars.discourse-cdn.com/v4/letter/c/f4b2a3/32.png) [@Cubsfan](https://boards.straightdope.com/u/Cubsfan)\ **Post date:** [December 28, 2002, 4:33am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/5 "2002-12-28T04:33:01Z")
That is because there are a million churches almost everywhere you go. A few people decide they want to sing different hymns that the current church they go to so they open one up in a strip mall. At least thats how it is in Colorado Springs. Churches in strip malls. No shit. Why one town needs 100 different Christian churches is beyond me. Linda like McD’s I guess. Yes small towns may be exceptions to the rule, but even medium sized churches pastors typically roll in nicer rides than the patrons of the church. ---
**Author:** ![Cubsfan](https://avatars.discourse-cdn.com/v4/letter/c/f4b2a3/32.png) [@Cubsfan](https://boards.straightdope.com/u/Cubsfan)\ **Post date:** [December 28, 2002, 4:34am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/6 "2002-12-28T04:34:36Z")
> [@](#): > > applying property taxes to churches might well create more entanglement between religion and government than would tax exemption. This sounds very backwards. Can you elaborate on this thought process for me? I know you didn’t write it, but you quoted it which means you may understand it better than I. ---
**Author:** ![happyheathen](https://avatars.discourse-cdn.com/v4/letter/h/b5e925/32.png) [@happyheathen](https://boards.straightdope.com/u/happyheathen)\ **Post date:** [December 28, 2002, 4:35am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/7 "2002-12-28T04:35:06Z")
WAG: Time was, the Church _WAS_ the State - and the State did not tax itself. Next Q: If this is the historical derivation (European), why did it survive the Reformation? ---
**Author:** ![happyheathen](https://avatars.discourse-cdn.com/v4/letter/h/b5e925/32.png) [@happyheathen](https://boards.straightdope.com/u/happyheathen)\ **Post date:** [December 28, 2002, 4:39am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/8 "2002-12-28T04:39:42Z")
To apply tax, one must determine ownership - does the State want to get into deciing if the Parson’s car _really_ belongs to the Parson, or does it belong to the Church? What about the parocial school? Is it Church property, or is it, as a for-pay educational institution, a business? ---
**Author:** ![Cubsfan](https://avatars.discourse-cdn.com/v4/letter/c/f4b2a3/32.png) [@Cubsfan](https://boards.straightdope.com/u/Cubsfan)\ **Post date:** [December 28, 2002, 4:44am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/9 "2002-12-28T04:44:49Z")
Ok, so if the church owns the parsons car does the church pay the annual fees and registrations on the car or are they waived due to the car being registered to the church? And if the parsons pay the fees then the state is already determining ownership so wheres the problem? ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [December 28, 2002, 5:34am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/10 "2002-12-28T05:34:54Z")
> [@](#): > > understand that legally they are tax exempt, but my question is WHY are they tax exempt? > > Are churches really “non-profit” groups? > > Based on my26 years on this earth my opinion is that churches should NOT be treated any different than any other business, but I am looking for factual answers to this question, if possible. Except for (maybe) property taxes, I’m not sure that churches are treated differently from other non-profit organizations (the proper group for comparison). Are churches really non-profit groups-I can’t say that no one is running a scam, and I’m sure some are but most churches are non-profit. I even know more than a few where the ministers are not paid and hold down full-time jobs elsewhere. But being non-profit doesn’t mean the employees (including the ministers) can’t be compensated well.It just means there aren’t any owners who divide what’s left after expenses. ---
**Author:** ![critter42](https://avatars.discourse-cdn.com/v4/letter/c/7ba0ec/32.png) [@critter42](https://boards.straightdope.com/u/critter42)\ **Post date:** [December 28, 2002, 6:56am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/11 "2002-12-28T06:56:22Z")
> [@](#): > > \*Originally posted by Stinkpalm \* > \*\*Why one town needs 100 different Christian churches is beyond me. \*\* Only 100 different churches? Come on down here to the buckle of the bible belt…I think we have that many Baptist churches alone… critter42 ---
**Author:** ![Markxxx](https://avatars.discourse-cdn.com/v4/letter/m/5daacb/32.png) [@Markxxx](https://boards.straightdope.com/u/Markxxx)\ **Post date:** [December 28, 2002, 7:11am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/12 "2002-12-28T07:11:16Z")
Just because an organization makes a lot of money doesn’t mean it isn’t not for profit. For example back when I lived in Naples, Fl the Community Hospital was so successful that they converted their Urgent Care to a another hospital (North Collier Hsp), then they were still endnager of losing their status as not for profit so they buildt this extravagant parking garage. Also remember while the 1st amendment prohibits the establishment of religion it also guarantees freedom of religion. The courts have also ruled that taxing churches would be a burden on them and prevent freedom of religious expression. As if they had to pay tax they would be out of service. ---
**Author:** ![hammerbach](https://avatars.discourse-cdn.com/v4/letter/h/73ab20/32.png) [@hammerbach](https://boards.straightdope.com/u/hammerbach)\ **Post date:** [December 29, 2002, 4:25am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/13 "2002-12-29T04:25:35Z")
I have a close friend who is a church pastor, and you may be assured that HE is getting taxed. (Worse than me, actually). Interestingly, he is considered by the IRS to be self employed. If I give money to his church to enable thier charity work (of which there is a great deal), I would prefer that it not be taxed before being passed on to those in need. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [December 29, 2002, 4:51am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/14 "2002-12-29T04:51:55Z")
> [@](#): > > \*Originally posted by hammerbach \* > \*\*If I give money to his church to enable thier charity work (of which there is a great deal), I would prefer that it not be taxed before being passed on to those in need. \*\* IMO, churches should have to divide their income into two categories: true charitable work, and religious stuff. Only the true charitable work should be tax free. Equally, if someone gives money to their church, only the portion that goes to charitable work should be tax-deductible for the donor. ---
**Author:** ![racer72](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/racer72/32/3075_2.png) [@racer72](https://boards.straightdope.com/u/racer72)\ **Post date:** [December 29, 2002, 5:35am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/15 "2002-12-29T05:35:24Z")
> [@](#): > > \*Originally posted by Stinkpalm \* > \*\*Ok, so if the church owns the parsons car does the church pay the annual fees and registrations on the car or are they waived due to the car being registered to the church? > > And if the parsons pay the fees then the state is already determining ownership so wheres the problem? \*\* The registered owner of the vehicle is responsible for the vehicle taxes and licensing. If the church owns the vehicle, the church pays the fees. If the parsons owns the vehicle but the church pay the fees, the parsons would have to claim that amount as taxable income. The pastor of my church is considered a contract employee and his is responsible for all his own taxes and insurance. The other workers for the church are considered employees and taxes are withheld from their pay. The church also has a small non profit book store but we collect sales tax on all purchases. The church also has to pay taxes for all it’s utilities. And in order to obtain a permit to expand the parking lot, the church has to pay road use taxes for the next 10 years to offset the perceived increase in traffic the church causes. Overall, my church probably pays more in taxes than the residential housing around the church. ---
**Author:** ![Monty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/monty/32/47_2.png) [@Monty](https://boards.straightdope.com/u/Monty)\ **Post date:** [December 29, 2002, 6:45am UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/16 "2002-12-29T06:45:29Z")
amarone: And I suppose you would have donations to other charities follow the same division as to deductability? The percentage of the funds collected that’s spent on administration, etc. would be taxable? ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [December 29, 2002, 12:45pm UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/17 "2002-12-29T12:45:11Z")
> [@](#): > > \*Originally posted by Monty \* > \*\*amarone: And I suppose you would have donations to other charities follow the same division as to deductability? The percentage of the funds collected that’s spent on administration, etc. would be taxable? \*\* Nope, that’s not the same thing. The administration of the church’s charitable activities could also be tax-deductible, so your point doesn’t hold up. My point is that I don’t see the act of spreading and maintaining a religion as being a charity and therefore associated costs should not be tax-deductible. There again, it would be a whole lot simpler if no charitable contributions were tax-deductible. ---
**Author:** ![norinew](https://avatars.discourse-cdn.com/v4/letter/n/eb9ed0/32.png) [@norinew](https://boards.straightdope.com/u/norinew)\ **Post date:** [December 29, 2002, 1:29pm UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/18 "2002-12-29T13:29:47Z")
> [@](#): > > Equally, if someone gives money to their church, only the portion that goes to charitable work should be tax-deductible for the donor. IMHO, this is totally wrong. For one thing, for the most part, the donors do not determine where the money goes. It would also put a burden on the contributor to determine exactly where each penny of his donation went, so he could put it on his taxes. IMO, this would represent such a burden that many people would simply stom giving money to churches. I just don’t think this approach is practical. ---
**Author:** ![kanicbird](https://avatars.discourse-cdn.com/v4/letter/k/5f8ce5/32.png) [@kanicbird](https://boards.straightdope.com/u/kanicbird)\ **Post date:** [December 29, 2002, 2:05pm UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/19 "2002-12-29T14:05:40Z")
It would seem to me that the ‘Sepperation of Church and State’ Amendment (even though I looked and looked and couldn’t find such an amendemnt) would have to swing both ways. If you want the gov’t to have nothing to do with the Church then the Church should have nothing to do witht he Gov’t. Also who wants to be the one to tax God’s house anyway. ---
**Author:** ![AskNott](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asknott/32/5790_2.png) [@AskNott](https://boards.straightdope.com/u/AskNott)\ **Post date:** [December 29, 2002, 2:32pm UTC](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296/20 "2002-12-29T14:32:57Z")
> [@](#): > > \*Originally posted by happyheathen \* > \*\*WAG: > > Time was, the Church _WAS_ the State - and the State did not tax itself. > > Next Q: > > If this is the historical derivation (European), why did it survive the Reformation? \*\* You started out in the right place, but you made a wrong turn, **happyheathen**. In pre-US Europe, the church was often at the helm of the ship of state(behind the scenery, but steering all the same.) The result was that folks who were in a different church got trod upon. The guys who sculpted the new USA government wanted to make sure it didn’t happen here. In _very general terms_ , the deal is this: The government can’t favor any one church, the church runs its own shop, and, later on, it worked out that the churches are not taxed. Here in Indiana, if a church opens a school or some other business, the new venture and its property are outside the exemption. If I take this any further, I’m gonna get really opinionated. This isn’t the place for that. –Nott Be of good cheer. [Next page](https://boards.straightdope.com/t/why-is-money-taken-in-by-a-church-tax-free/145296.md?page=2)