Posts tagged with: tax exemption

gr cityThe city of Grand Rapids, Mich. continues to deny the Acton Institute application for property tax-exemption, even as Acton presents evidence to support such status.

The Acton Institute, recognized by the Internal Revenue Service as a 501(c)3 non-profit organization and ranked #11 in the world as a social policy think tank by the University of Pennsylvania, received notice from City Assessor Scott Engerson that it did not meet the criteria for tax-exempt status for property tax purposes.

Most people think that if they’re a tax-exempt 501(c)3 they’re exempt from property tax, and that’s not the case in Michigan,” he said. “In regard to Acton, it’s the charitable piece that the city was not able to definitively conclude.”

Acton is one of 435 organizations appealing the city’s ruling regarding tax-exemption this month alone. Today, Acton made its appeal. (more…)

parsonage (1)On Friday a federal judge ruled that an IRS exemption that gives clergy tax-free housing allowances is unconstitutional. The exemption applies to an estimated 44,000 ministers, priests, rabbis, imams and others. If the ruling stands, some clergy members could experience an estimated 5 to 10 percent cut in take-home pay.

Aside from the question of constitutionality, the clergy exemption raises a question that many people — whether religious or not — are likely to be wondering: Why exactly do ministers receive a tax exemption for their housing allowance?

At the website of the Ethics and Religious Liberty Commission, I explain the historical, legal, and ecclesiological reasons for allowing the exemption and why it’s an issue of religious freedom:
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Guidelines for nonprofits are often misunderstood, says Dimitri Cavalli, and they are sometimes misrepresented by those seeking to quiet churches:

Every so often, there are calls for the federal government to revoke the tax-exempt status of churches. The most common arguments made for taxing churches are that exemptions deny the government important sources of revenue to pay its bills, and that many churches (usually the ones that continue to teach traditional sexuality morality such as the Catholic, Evangelical, and Mormon churches) often abuse their tax-exempt status by violating IRS guidelines that prohibit them from engaging in political activity. The chronic obsession with the activities of the churches in the public square has obscured the fact that they are only a part of the overall nonprofit sector. According to data collected by the National Center for Charitable Statistics (NCCS), there are over 1.5 million registered nonprofit organizations (with combined total assets of nearly $5.7 trillion as of August 2012) in the United States today—many of which are nonreligious institutions and organizations that, like churches, seek to influence public policy despite being tax-exempt.

Read more . . .

The New York Times’ “Room for Debate” feature highlights religious freedom this week by asking the question: “Should Churches Get Tax Breaks?”

The contributors, who span the continuum of opinions on the issue, include Susan Jacoby, Christopher L. Eisgruber and Lawrence Sager, Winnie Varghese, Dan Barker, and Mark Rienzi.

Jacoby, who recently debated the merits of Christianity in American politics and Grand Rapids’ Fountain Street Church, is an advocate for secularism and author of The Age of American Unreason. Jacoby argues that if a church wants federal help, it must play by the government’s rules:

 In cases involving freedom of conscience, government policy—like the Bill of Rights—should always be on the side of the individual. If churches don’t like the strings attached to public money, they are free to refuse taxpayer subsidies. The First Amendment was not written for an America in which religion claimed the right to have it both ways.

Eisgruber and Sager, coauthors of Religious Freedom and the Constitution, argue for “exemptions for noble work, but no extra exemptions just because it was done in the name of God,” saying: (more…)

Blog author: jballor
posted by on Thursday, August 3, 2006

This story makes me think of an old joke. Stafford, TX has a population of 19,227 people and 51 churches. The city council is making noise about preventing any more churches from opening up because, as tax-exempt organizations, they are threatening the viability of the local government.

My initial reaction: In one sense this is nothing new. Ever since the days of the Holy Roman Empire, church estates have been free from the taxes of civil government, and as monastic and ecclesiastical property holdings grew larger, the civil magistrate grew more and more covetous…after all, there is no tax exemption from the tithe.

I do, by the way, support the idea that the church should be free from paying taxes to the civil government, and not simply because the government deems churches to be of positive social value. The Church and the State are different institutions with different orders of authority. You might say that the State has no authority or right to tax the Church.

And this might even true even if churches want to make political statements (although I have my own view about the prudence of doing so). In this sense, churches perhaps aren’t like other nonprofits, and so perhaps these IRS warnings are based on a misplaced view of the authority civil government.

But I digress. Living in West Michigan, which I believe has to have one of the largest proportions of church space per capita in the country, this hits home. You’ve probably all heard it in some form or another:

A man was shipwrecked and he was able to find his way to an island. He lived there alone for 10 years.

Finally a ship came to his rescue. His rescuers saw three huts that he had constructed and they were puzzled by that. They asked him if he were alone on the island and he answered that he was.

Then, “What was this hut used for?” they asked.

“I live there.” he replied.

“What was the second hut used for?” they asked.

“Oh, that’s where I go to church.” was his answer.

“And the third?” they queried.

“Hmmph! That’s where I used to go to church.”

HT: WorldMagBlog