Should Churches pay taxes?

I’m not sure if the Church is doing its part in our society.  As I’m about to spell out, perhaps society lets us off too easy.

Mission Trips take you out of your routine. Last week was one of those weeks for me.  I fairly quickly developed a routine for the week.  That’s what we do, as people.

One of the drastically different parts of my routine on Mission Trip, I have to admit, is regular visits to WalMart. During the rest of the year I am in Walmart maybe once a month.  During mission trip, I average about once a day.

But, never fear, I have my WalMart tax-exempt card.  As I work for a non-profit and CTCYM Mission Trips are organized by the Church, and are thus tax-exempt, I don’t have to pay taxes on those daily supply trips.

But should I?

These days most states are making drastic cuts in their budgets, and budget cuts mean cuts in services. Since mist states rely heavily on sales tax revenue, is it really fair that churches are exempt from paying sales tax?

This was just the beginning snowball of thought on whether or not Churches are paying their fair share.  I wonder what the value of tax-exempt property owned by churches is, and what a difference that might make on state budgets.

Many of us in the church have been crying loudly about proposed (or enacted) state and federal budget cuts and how they seem to have the greatest affect on those who can least afford it.

Yet we hold tightly onto our tax-exempt status.

Perhaps it is time, Church, to let go of the privilege given years ago, and to step up and do our fair share.

Should all non-profits forsake tax-exemption?  Perhaps not.  But a lot of non-profits exist for service to community and world.  How much of the typical church budget (or property holding) is for service to community and world.

Let’s step up, Church!

12 thoughts on “Should Churches pay taxes?

  1. It depends on whether you think tax money belongs to the government to spend as it will, or to individuals that earn the money and contribute their money to a common coffer for the common good. If it belongs to the government, then certainly it is a fair question whether the government should favor some groups over others and allow them to get off scot-free from taxation. If it belongs to the individuals that earn the money, then the same people that contribute to the church have already contributed their “fair share” through individual taxation. Of course, except for those individuals within the church that don’t earn enough to be obliged to pay taxes in the first place.

    Taxing non profits of all stripes will reduce the amount of revenue they have to do their jobs … taxing them would be saying “Here, government will take part of the money donated to you to do [fill in the blank, but usually humanitarian causes] and will distribute that money for you.”

  2. We like to turn tax issues into “redistribution of wealth,” but that’s mostly a red herring argument.

    I like the fire department that shows up to my church if the alarm is pulled.

    The police department when the alarm is tripped.

    I like the sewer and water systems hooked up to my church building.

    The, city, county, state, and federal road systems that people travel to get to and from the church building.

    A lot of the infrastructure that the church depends upon is tax supported. The church, in this case, is getting the free ride.

    Perhaps wealth is being redistributed, and the welfare queen is us.

  3. While I appreciate the various comments made so far, they seem to be a bit simplistic.

    1) What types of taxes are we talking about? Income, property and sales taxes? Federal? State?
    There are various types of taxes and not all taxes go to pay for things like fire and police.

    2)The US government has a history of not taxing entities that work for the greater good of society, and the church (along with mosques, temples,and other religious entities) falls into that grouping. Imagine in the United Way were taxed on their ‘income.’ Imagine if individuals were not allowed to right off the charitable gifts they gave. My wife and I would then no longer be able to afford to give anything. We make a fairly modest salary by US standards, but we try to give a great deal of it away. This would no longer be possible and the magnification of that effect would be tremendous.

    May I suggest you look for a church actually involved in matters of social justice? Might you look towards a church were you see more flowing out of the church in a way that makes an impact on your community and your world?

    • Good points, Ryan. I suppose my concern was/is about how bout of a congregation’s time, energy, and money are employed for “the greater good of society.”

  4. @Ryan I’m a pastor. I understand the inner working of the finances of a church, specifically small congregations. The last church where I was the lead pastor, chose to pay city and county taxes to support the poverty sticken area that was our parish. It was our choice to live as a community in the same way our neighbors did. It may not have amounted to much financially, but it was an act of solidarity with the poor in our little city.

    By the way, it’s pretty presumptuous to assume that any of us that have written so far are not part of a church that is involved in social justice.

    There’s a big difference between simplistic and I didn’t feel like getting into the nuts and bolts of it. The comments section of someone else’s blog isn’t a place to write business models and tax code revision proposals.

    And honestly, my position is Caesar’s to Caesar. I don’t much care about what the government has done traditionally regarding churches (United Way–as it is not a church–is a red herring in this discussion). A Church’s tax exempt status excludes its participation in politics, which I think is a horrible concession of the Kingdom to the state. I’m not advocating for political involvement, but the freedom for a church to do so. Tax exempt status muzzles the Church.

    You can read about the details here:,,id=161131,00.html

  5. Kurt,
    my assertion about being in a church that contributes to the greater good of society was not at all meant to be an attack on any poster here. I just know too many churches that exist for their own good, rather than for the good of those who aren’t members. I figure we all know churches like that, and a good way to ‘fight’ against a church not doing it’s part to contribute is to not be in those churches. I believe that we should always do some self examination about what roles our churches can play in giving back. I too am a pastor and so I know the struggles of balancing all of these things.
    Also, my bringing up the United Way, was to talk about the fact that as far as the US government goes, we are all 501c3s. (I believe that is the right tax number). That means that the US government makes no distinction between us, and so for the purposes of argumentation, I was saying we fall into the same category as they do in the eyes of the US government. I was not trying to mention them as a red herring.
    I commend the way your church has wrestled with giving to the poor in your community. Our church does it by giving directly to a food bank (that does much more than that. It is really a Christian social services agency), helping fund a free clinic, driving for meals on wheels, giving to Hope Pregnancy… among other things.
    What I was attempting to do was to call all local congregations to examine themselves and the ways they engage the poor. I believe that is the crux of this post. Paying taxes in general is a side issue. Are we as churches about Kingdom business, whether we are taxed or not? I would hope we could answer: “Yes, and more and more.”

  6. @Ryan, I apologize for my harsh tone, but I perceived the tone of of some of your comments to be somewhat condescending. I’m sorry for making that assumption.

    There is a huge distinction between the church and other non-profits (you were on the mark for the 501(c)(3)), regardless of US tax code. The church is distinctly a body of disciples of Jesus Christ, United Way is not. I think what you’re church does is the new model of ministry; that is, partnering with organizations that do social justice much more efficiently than the church could ever hope. If the church was taxed, then it could claim its charitable donations–if it wanted to–to reduce that tax burden just like any individual or business taxpayer. I’m not sure how the existing tax code would accommodate that.

    I disagree with you on how to fight congregational apathy. From a lay persons perspective, he or she can work with the pastor to lead the church toward one that provides for the least-of-these. This is mission not only to those without the church, but also toward those sleeping souls within. Only when all efforts have failed in that regard, would I recommend finding another congregation. In a similar sense, the pastor has the same responsibility. I’m of the opinion that (at least from the United Methodist perspective) that the Bishop exercises his or her power to close churches that are nothing more than tax-exempt social clubs.

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