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Tax exemptions may not be the most common issue facing courts in arguments over the separation of church and state, it is one of the most fundamental. Initially it appears to be a form of government support for religions and religious activities; on the other hand, the power to tax is the power to restrict or destroy, so is exempting religions from taxation a means of ensuring their independence?


Read Article: Why Taxation of Religion Matters

August 22, 2007 at 3:56 pm
(1) tracieh says:

Tax benefits for 501c3 groups are necessary to their operation. Many people—in fact some of the wealthiest people—who donate to charities will only do so if the donations are tax exempt. Also, some organizations I am involved with that are 501c3 could never operate if they had a tax burden. One group I’m helping right now—a shelter—came inches from having to shut their doors within one week. We’ve barely managed to get them enough money to keep them going for another couple weeks—but their future is still not secure. Many of these groups are staffed by volunteers and can’t pay decent wages to their paid staffers when they do have funds for such things. Some of the charities I know with the biggest hearts have the smallest budgets, and any extra financial burdens could make the difference between operating versus closing their doors.

That said, I have never had any ethical problem with a church being tax exempt; but not because I consider it to be a charity. I consider that taxes fall under the realm of “Tax Law”—and Congress is barred from making any laws “respecting an establishment of religion or prohibiting the free exercise thereof.” And I think a very solid argument can be put forward that imposing tax on worship in any way, could represent an imposition. What if a church, for example, found itself in the situation I described above with regard to that shelter? If a church shut its doors due to an inability to pay a bill—specifically a tax bill—wouldn’t that be a law that impacts the freedom of worship? I’d say so.

You mentioned a number of taxes that I’m assuming have stood the test of the courts. And I admit that I’m not an expert in Constitutional Law or even regarding the Establishment Clause. But speaking for myself, the logic in the prior paragraph has always made me completely comfortable with the idea of not imposing taxes on churches.

THAT being said, I have to say that with regard to your comment

>but do they also have a right to public assistance in doing so?

my response is ABSOLUTELY NOT. The church/state separation is not a one-way street. Congress is just as wrong to grant tax money to any organization that promotes religion in ANY way–as I believe they would be in taxing religious groups. That’s just as much a breech of the Establishment Clause in my opinion. Where taxing a church could interfere with free worship, granting tax money to organizations that preach or promote religion is clearly working to support “an establishment of religion.”

It could be subverted if the granting of funds was not the result of a “law”—but there’s a “spirit of the rule” issue here as well as a technical reality.

Because the Constitution grants religious freedom—I’ll go up against anything that threatens that—even taxation of a religious group. BUT, I expect the churches to respect that the government can’t support their religion or do anything that could be considered a promotion of it. Fair is fair. If churches are state-free by not paying taxes, then the state should be church-free by not handing public funding over to a church.

I know this issue is not cut-and-dry (see my response to your earlier post about fixing up old buildings–where I express confusion about whether or not I’d give tax dollars to a church–but lean toward doing so)—but this is a break down of my general view of it.

August 22, 2007 at 7:14 pm
(2) Kafir says:

While imposing a tax on churches may run the risk of taxing it into oblivion, it still stands that not taxing a church indirectly passes on the cost to the tax-paying public where churches could indeed give quite a chunk of change in taxes. If churches are not to be taxed, then at least pass on the burden of such a system only to those who actually utilize the churches, not to irreligious people.

As I understand it, a similar system is already in place in Germany, wherein taxpayers register their specific church membership on their taxes to pay the government mandated church tax, and whoever doesn’t register with a church, is not required to pay. At least this way, the state acknowledges the class of people who in no way benefit from local churches, and does not burden them.

August 23, 2007 at 9:22 am
(3) tracieh says:


As I’ve noted, I’m still open to ideas about this issue. My mind is in no way made-up on all sides of this. But just as an immediate thought to what you just posted, here is how I reacted:

> If churches are not to be taxed, then at least pass on the burden of such a system only to those who actually utilize the churches, not to irreligious people.

We don’t tax 501c3 nonprofit charities. If I used the logic above, I’d have to say something like this: “If charities that help abused/homeless animals are not to be taxed, then at least pass on the burden of such a system only to those who actually utilize the charity, not to those of us who do not.”

So, would we then tax people who volunteer at animal shelters or who adopt animals from the shelters? Such a tax would impede the work of the charitable organization. Less people would be willing (and perhaps able) to volunteer; and less people would adopt if the cost of adoption went up. The shelter isn’t taxed–and not everyone cares about animals–should those who don’t care about animals have their tax dollars go to animal shelters that operate as nonprofits?

The fact is, my tax dollars go to MANY things I do not personally support. BUT other people’s tax dollars go to things I support that they might not. We have a lot of people in this country–and we fund things that are determined to benefit our greater community. And we don’t tax them if they operate as a nonprofit. In the case of churches, the way I interpret it, we don’t tax them because the Constitution forbids it. This is my thought with regard to your second paragraph. Euro countries aren’t driven by the U.S. Constitution. They can pass laws regarding religion–we cannot. I am not at all sure we could levy a tax on churches without a Constitutional amendment–but I’m open to better information if anyone would like to tell me if I’m operating under a false assumption (because again–this is my personal interpretation of the Establishment Clause–and maybe I’m not reading it as it has been historically interpreted with regard to taxation of churches)?

August 23, 2007 at 9:54 pm
(4) Ron says:

Heres another thought. let it be. The fear of losing 501c3 status is a lever to keep them out of politics

January 27, 2011 at 9:27 pm
(5) cranker says:

It doesn’t seem to be working. Religion is politics except they have an invisible leader and about a million parties.

August 24, 2007 at 7:50 am
(6) tracieh says:

Obviously this article isn’t unbiased, but I wanted to make sure I wasn’t assuming too much.


Churches are tax exempt whether or not they are 501c3–the Establishment Clause protects them against legal taxation–because laws that create any hardship on freedom of worship are un-Constitutional. I really don’t know why churches file as 501c3. My first thought is there must be some benefit? Public funding? But I’d have to look it up. I’m not well enough informed on it to comment. I’d only be guessing.

August 24, 2007 at 8:04 am
(7) Austin Cline says:

Churches are tax exempt whether or not they are 501c3–the Establishment Clause protects them against legal taxation–because laws that create any hardship on freedom of worship are un-Constitutional.

The article you cite is incorrect.

First, it’s not necessarily unconstitutional to create “any hardship on freedom of worship.” Some hardships are constitutional, some are not.

Second, there is no constitutional barrier to church taxation. Walz v. Tax Commission of the City of New York upheld giving tax exemptions to churches, but it is noteworthy that the case was not decided on the basis that taxing them would burden freedom of worship. Both taxing and not taxing churches would lead to entanglement with religion.

Third, the authority of the government to tax churches is demonstrated unambiguously by the fact that churches can lose their tax exempt status. If churches could not be taxed, then this wouldn’t be possible.

The article you cite isn’t merely biased, it’s completely lacking accurate information. You’ll notice the complete absence of any citations of any laws or court decisions. The author is simply making things up.

I really don’t know why churches file as 501c3.

That is the provision in the tax code under which tax-exempt status is available to them.

August 24, 2007 at 11:26 am
(8) tracieh says:

Thanks for that. I obviously need to research this more for sure before I comment further. I appreciate the information/correction.

August 24, 2007 at 2:19 pm
(9) tracieh says:

I went and read your article about church/property tax for the case Walz v. Tax Commission of the City of New York.

>”In the end, churches become beneficiaries of government services – fire protection, police protection, etc. – without actually paying for any of it. Because those services are at least in part funded by others who do pay taxes, then taxpayers are forced to indirectly make contributions to religious institutions in violation of the Establishment Clause.”

This is a good point. I need to consider this further.

>”Both taxing and not taxing churches would lead to entanglement with religion.”

I did see that in the excerpts of the justices rulings you provided. And they did appear to be content to examine only the establishment portion of the clause—without referencing the free exercise portion in this case. I also visited another site (a little better than the one I Googled early this morning—to my embarrassment), and the full context of the opinions still focused on establishment rather than free exercise (very much in line with your article):


I am still interested in opinions regarding free exercise and taxation—and if there are any (I have to say that if there are any, in my searches they’re not popping up). I know that justices don’t always use all available arguments to uphold opinions. Like Geometry proofs, there are often multiple routes one can employ in getting to the same solution(and I know you know this—I’m just thinking out loud).

>”First, it’s not necessarily unconstitutional to create ‘any hardship on freedom of worship.’Some hardships are constitutional, some are not.”

I would agree that I personally would want to look at each case individually. And you’re right “any” hardship was too broad a statement for me to make. However, the Constitution is clear that Congress can make no law impeding the free exercise of religion—and taxes are levied under tax law. And people and groups can be impeded via taxes/taxation—even shut down. I would view any law that presents a potential hardship to free worship as potentially violating the Establishment Clause. And I wouldn’t support such a law without significant cause and a really solid argument.

This was an interesting document:


>”Congress has enacted special tax laws applicable to churches, religious organizations, and ministers in recognition of their unique status in American society and of their rights guaranteed by the First Amendment of the Constitution of the United States. Churches and religious organizations are generally exempt from income tax and receive other favorable treatment under the tax law; however, certain income of a church or religious organization may be subject to tax, such as income from an unrelated business.”

It also notes the following:

>”Churches that meet the requirements of IRC section 501(c)(3) are automatically considered tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS.

>“Although there is no requirement to do so, many churches seek recognition of tax-exempt status from the IRS because such recognition assures church leaders, members, and contributors that the church is recognized as exempt and qualifies for related tax benefits. For example, contributors to a church that has been recognized as tax exempt would know that their contributions generally are tax-deductible.”

The entire document deals with churches in the 501c3 category. And here again, I’m left wondering: Can they be exempt without this status? Or was that the case historically? This is definitely an area where I need to be better educated.

August 24, 2007 at 5:44 pm
(10) Ron says:

Regarding hardship of worship. On any clear evening, I can go out of doors and elevate my gaze to the stars. Where is the hardship???

August 27, 2007 at 7:29 am
(11) tracieh says:


Christians are told in the Bible how they must worship. They must do so in groups. During the early years, they appear to have met in houses or public places; however, today we have some really big groups meeting or small towns where there aren’t any meeting places to accommodate a church meeting of the size they might need (in fact, in some places, churches function as a meeting hall–allowing all sorts of nonreligious meetings of other groups outside of just the church).

I’m having trouble seeing a church tax as being any different than, say, a poll tax–which I also wouldn’t support.

If looking up at the sky constituted Xian worship, I’d agree that a tax didn’t offer any hardship–since we don’t tax looking up at the sky. But the question here is more analogous to: What if the government did decide to tax “looking up at the sky”–and that was the way you accommodated your form of worship? Would that then be a hardship in your opinion? If a church group can’t get a building–that’s a hardship. Having to meet in members’ homes would be a hardship. There are some churches who do this–meet in members’ homes and rotate between members–but that’s hardly as accommodating as being able to purchas their own meeting hall. Not having a hall puts a huge limit on their ability to accommodate the members and the worship service.

September 5, 2007 at 12:36 pm
(12) Ricky Callwood says:

Saving souls is a “charity” only according to religion. Thus, this rationale should not be considered by government.

September 20, 2007 at 3:40 pm
(13) Tom T says:

I really don’t see this as all that complex an issue.

If relious groups are going to get tax breaks as ‘non profit organisations’ they should conform to the same rules and requirements of all other non-profits. Secular and just plain non-religious.

And if any non-profit expects tax exemption then it should not expect government help.

July 20, 2008 at 8:37 pm
(14) Leon says:

I live around the corner from Pastor Hagee’s Cornerstone Church in San Antonio, TX.

I don’t have a problem with giving tax breaks to a poor minister of a small congregation on the South side, who struggles to keep his head above water and lives on minimum wage.

But I do a huge propblem with giving tax breaks to Hagee and his family so that they can can continue to rack in the millions and maximize their profits at the expense of their brainwashed followers and, more importantly, at taxpayers’ expense.

There must be a way to make these leeches pay their fair share of the burden they put on the community.

July 21, 2008 at 11:53 pm
(15) John K says:

Government cannot dictate who or what a religion can worship, if anything, nor can it dictate what a religion should preach or what book it should preach from. Aside from those limitations, all activities of a religion are subject to government control.

A church might claim it does not have the funds to make their church meet building codes, but that’s just too bad. You meet building codes or you don’t build. Some religions claim God proscribes polygamy, but the government will not sanction it. When churches buy a vehicle, the vehicle has to meet safety standards and must operate within the traffic laws. Are these impositions or hardships? Hey, things are tough all over. If the government decided to tax churches, they could do so.

Of course, any politician who suggests religions should be taxed wouldn’t stay in office long. Only until the next election.

January 27, 2011 at 8:01 am
(16) P Smith says:

If churches are “tax exempt”, then they are benefits exempt as well or they can pay user fees. If the cults are obtaining the benefits of tax funded services, like the police, then they should pay taxes.

Bill Maher said it best (17 February 2006):

“New rule: If churches don’t have to pay taxes, they also can’t call the fire department when they catch fire.

‘Sorry reverend, that’s one of those services that goes along with paying in. I’ll use the fire department I pay for. You can pray for rain.’ “

What’s next? These cults expect the public to pay their utility bills as well?


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