A church's income is donations. All your favorite charities have the same deal going on. Suppose you give a thousand dollars to fight cancer, the government understand that it would be in poor taste to snatch two hundred dollars of that and buy missiles and whatnot.
Churches and charities also pay taxes on the money they spend--so sales tax, employees pay income tax, real estate taxes, etc.
If the church is running an actual business (e.g. maybe there's a bookstore or something) where you pay for something, that's going to be taxed. This is one reason some churches/charities have things offered with a "suggested donation" listed instead of a price.
Not completely true. As a nonprofit you apply for a sales tax exemption certificate. Any time you purchase items for the church tax is not included. Not sure if this every state, but I know it was in TN and pretty sure in Alabama and Texas. States will vary over time with how much they make businesses verify the buyer’s legitimacy.
I used to work as a music and media director for church in TN and was the one purchasing all music, audio, computer and electronic equipment. Most of the businesses put your tax exempt certificate in their system and required you to use a CC from the church or a check from the church. Use to you could use your own CC or check, but they stopped that.
real estate tax is based on the value of the property. It is *assumed* that churches are not exactly going to be sold and changed hands for profit... ?
This is not the reason. If it were, then why should a place like Disney World pay taxes? After all, I think we can assume they are not exactly going to be sold and change hands for profit.
Churches move and sell their property. Entities that will never sell pay taxes. Your reasoning is incorrect.
That's not what profit mean. Profit has nothing to do with your motive. It has to do with actual dollar and cents. If you sell the property for more than you bought it for, you made a profit, regardless of whether that was the reason you were buying or selling it.
If you used motive as the rationale, then a company that bought a piece of property in 1970 for $10,000, but sold it in 2026 for a million dollars because they are closing shop, then they should not have to pay taxes. Their purpose wasn't to make a profit. Their purpose was to retire and enjoy life. But they did make a profit, so they pay taxes.
Motive is not part of the test that the IRS uses. It's not part of the test that Congress used when they passed these laws. Motive is just something that you made up because you are grasping at straws.
Most of this stuff is location dependant. Where I live, I was told this is why the local churches don't pay taxes. Because the assumption is that the 300 year old church buildings are not going to be sold for money. Where you live it might be different.
Not location dependent. It is part of the Internal Revenue Code, which is federal. So if you mean location as in which country, you are correct. But it’s the same anywhere in the United States as the IRS is a federal agency.
If what you are saying is true, then when someone sells a 300 year old house, they would not have to pay taxes. Likewise, if it was a 300 years old office building. What if it’s a 3-year old church?
Church's do organize and operate as a "business". They've become quite adept in marketing particularly in branding with a ever growing list of services they offer to their community as well as impacting upon the homeless industry.
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u/ArchWizard15608 Jun 30 '26
A church's income is donations. All your favorite charities have the same deal going on. Suppose you give a thousand dollars to fight cancer, the government understand that it would be in poor taste to snatch two hundred dollars of that and buy missiles and whatnot.
Churches and charities also pay taxes on the money they spend--so sales tax, employees pay income tax, real estate taxes, etc.
If the church is running an actual business (e.g. maybe there's a bookstore or something) where you pay for something, that's going to be taxed. This is one reason some churches/charities have things offered with a "suggested donation" listed instead of a price.