Shocker: Tennessee Megachurch Opposes Getting Taxed November 22, 2010

Shocker: Tennessee Megachurch Opposes Getting Taxed

The Tennessee State Board of Equalization doesn’t tax churches.

But what about the gyms, bookstores, and cafes that are found in so many megachurches?

The state decided those are not part of the Christ Church ministry — they’re “commercial enterprises” — and therefore should be subject to taxation. $425,000 in property tax, to be exact.

That makes perfect sense. Which must be why the church is trying so hard to fight it.

The 2,300-member Christ Church insists that’s an outdated view of how churches operate, and those enterprises should be considered part of ministerial outreach.

“They think a church worships on Sunday and then everybody goes away,” pastor Dan Scott said. “Anything else you do is not church. But Christianity is not something you dive into once a week.”

… Christ Church shut down its cafe and bookstore and handed off its gym to the YMCA of Middle Tennessee this year as the dispute dragged on, moves meant to keep the tax bill from increasing.

The bookstore was too much like a commercial store, the board ruled. And because the gym charged membership fees, it was considered a business, not a ministry.

These churches have gotten away with tax-exemption for too long and if you’re looking for the next big battle for atheists, this is going to be it.

I don’t think most people know what should and shouldn’t be taxed — I’m certainly no expert — but figuring that out, and debating where the line must be drawn is incredibly important.

If any community member can pay membership for the gym located in your church, should it be taxed?

If a church bookstore makes a profit, should it be taxed? Which books can and can’t be sold in order to preserve a tax exemption? What about “regular” bookstores that sell a lot of Christian books? What’s the difference?

What about Chick-fil-As and Hobby Lobbys? Should they be tax exempt?

What’s the difference between coffee shops located inside churches and coffee shops that host a lot of Christian groups?

Should Scientology centers and mosques be taxed?

Should tithes get taxed?

What if a church endorses a political candidate, as many have done before? When will they get taxed?

If an Atheist Center of some sort opens up, should it be subject to property tax?

Some of those answers are really obvious. But not all of them.

I feel like atheists have a good idea of what constitutes church/state separation and when that’s violated. I don’t think I’m as confident, though, answering all the tax questions posed above. I have a hunch on most of them, but I can’t back those hunches up as well as, say, what’s ok and not ok to say in a public school.

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  • Revyloution

    What exactly constitutes being ‘a church’ anyways. Can you have an atheist church? I mean, if I build a building and fill it with ‘pews’ (bar stools) and hand out ‘holy sacrament’ (beer) for ‘donations’, all in order to pursue the highest form of human worship (dialog between people), how is this different from a church that has a gym?

  • mkb

    What I care about more than the specific rules is that churches be treated no differently than other non-profits. If a museum has a bookstore, how is it taxed? A church bookstore should be treated the same. If a Moose Lodge has a gym that charges fees, how is it taxed? A church gym that charges fees should be treated the same.

  • Iason Ouabache

    I fully expect the church to try to stack the Board of Equalization with members of their church in the next election. It’s what Pat Robertson would do.

  • Michael

    Tax all of them!

  • Hamilton Jacobi

    Separation of church and state is violated by not taxing churches as if they were businesses, because they are. It is only for historical and social reasons that we continue to pretend that this is not true.

  • Eh, I’m not entirely sure that’s true. For as much as we hear about the mega-churches that seem to make their proprietors rich, many churches do indeed fit the non-profit bill.

  • captsam

    Hamilton Jacobi has the correct idea, but unlikely it will come to pass in my life time.

  • Peter Mahoney

    How is an insanely wealthy organization like the Catholic Church, which makes HUGE profits from it’s parishioners (customers?) still considered a “non-profit” organization?

    When I was a kid, the priests in our parish had new cars every 2-3 years, paid by the church (while almost none of the parishioners could have afforded that for themselves). How is that different than a business CEO getting a free private jet airplane?

  • Tyro

    I say tax all churches unless they can qualify as a charitable organization. Good luck with that, considering how much they spend on themselves and their (exceedingly wasteful, underutilized) properties.

  • bernerbits

    I live walking distance from Christ Church. People drive through our subdivision (against the wishes of the HOA residents) on Sundays to avoid the main roads getting there. I knew that a YMCA opened there but I had no idea it was for tax reasons.

  • MikeW

    If giving these organizations tax-exempt status means they can’t have a say in elections, then I say it’s well worth the price. But as was pointed out, many don’t say silent, which means they should no longer be tax-exempt. That’s the part that needs to be fixed.

  • Anonymous Atheist

    On the ‘Undercover Boss’ episode last night, they showed a church that has opened a Subway sandwich restaurant in their building. They didn’t explain its financial/tax situation though.

    If churches want to operate businesses, they should have to compete on as fair as possible of a basis with the non-church-affiliated businesses in their field. All workers should be fairly-paid, and all taxes should be fairly-paid.

  • Rich Wilson

    Christianity is not something you dive into once a week.

    Well there you go. Obviously Christians should never be taxed.

  • Mr Z

    These organizations already have a say in elections, they have looped around the limits. When they are no longer tax exempt there is no question of what should be taxed and what should not. I’m all for treating them like PAC’s and regulating them forthwith. There is no stopping them from voting like a block, giving them advantage of tax exemption denies non-believers and promotes faith over non-faith. Go on, let see their books. I want a damned good look too.

    Screw them as they are not deserving of special status. Their special status causes the very questions asked in this post. Get rid of that status and the questions go away. As things stand right now, no non-faith group can achieve the same tax exempt status. There is need for addressing grievances.

  • Robert W.

    You guys do know that multiple atheist and humanist organizations have tax free 501-c(3) status?

    I assume you think this is okay.

  • Pseudonym

    Peter Mahoney:

    How is an insanely wealthy organization like the Catholic Church, which makes HUGE profits from it’s parishioners (customers?) still considered a “non-profit” organization?

    Because it doesn’t make huge profits from its parishoners. At least, not in the way you think. If you put money in the collection plate at your local Roman Catholic church, almost exactly none of it ends up at the Vatican.

    But yes, the Vatican is quite wealthy. That’s because it’s the only shareholder of a pretty profitable commercial bank, which I’m pretty sure (but don’t quote me on this) is taxed like any other bank.

    I agree with everyone who has essentially said that if a church is acting like a non-profit, and is willing to play by the same rules as any other non-profit, then it should be taxed the same as a non-profit. If they run a bookshop that’s essentially identical to a business, then that bookshop should be taxed like a business. This isn’t difficult.

  • Hammurabi

    Churches should be held to the same standard as all 501-c(3) organizations and not get tax-exemption just for being a church.

    The way it currently is set up, any group can claim to be a church and automatically get tax-exemption, leaving the IRS to spend millions tracking down and verifying those claims. Do the religious really want the IRS deciding who is and is not a church? Because they have been for centuries, just ask the Scientologists.

    Also, removing the church-specific exemption would require churches to disclose their financial records in order to maintain their 501-c(3) status, undoubtedly revealing an abundance of fiscal mismanagement.

  • Dan W

    I say tax them all. No church should be tax exempt, especially since so many of them like to tell people which political candidates they should vote for.

  • bernerbits

    You guys do know that multiple atheist and humanist organizations have tax free 501-c(3) status?

    I assume you think this is okay.

    Because atheists running a NPO is totally the same thing as a tax-exempt church making money selling books, gym memberships, and coffee.

  • ManaCostly

    Tax them, one law for all.

  • Gordon

    Well I think it is a scandal that churches are not taxed anyway. Think of the (actual) good that could be done with the money liberated if religion lost its tax exemption!

  • Miko

    Clearly the only reasonable solution is to eliminate all taxation.

  • We don’t tax non-profits, on the assumption that they not only can’t afford to pay taxes, but that the work they’re doing is more than justifiable – it’s worthy of a special exemption from what hard working Americans have to pay.

    But a church isn’t any of that. Especially those mega-churches. They can afford to pay taxes, and the work they do obviously isn’t in need of any special exemption.

    Religion demands and gets that special treatment. I believe that until they at least produce their god, that special treatment is improper. The fact that religion also causes harm only seals the deal.

    Now the additional fact that some of these churches are as large and wealthy as corporations only makes it a more glaring foulup in thinking.

    Whenever I find a wealthy Christian, I try to remind them that Jesus hates that: “It would be easier for a camel to pass through the eye of a needle than for a wealthy person to enter heaven.” I rarely hear a response to that one. Just silence as they turn and walk away.

  • Here’s my video about wealthy Christians and their megachurches vs. what Jesus had to say about wealth:

    I’ve tried to get some Christians to watch it. I can lead them to it, but Jesus’ words are just too much for them sometimes.

  • Apparently rendering certain things unto Caesar isn’t as popular as it used to be with the Biblical set.

    I wonder…if an attendee of that church saw this, would it be overly cynical of me to brace myself for them to start shouting that we haven’t complained about Muslims’ tax exemption with mosques?

  • sven

    I ordered an FSM car sticker two weeks ago, the invoices stated tax and shipping costs. OUTRAGEOUS!

    @Robert W

    You guys do know that multiple atheist and humanist organizations have tax free 501-c(3) status?

    I assume you think this is okay.

    Do the people running these organizations own a lot of cars, or take multiple trips to Europe for no apparent reason (hiring male-prostitutes to ‘carry their luggage’)?

  • mkb

    Robert W:
    “You guys do know that multiple atheist and humanist organizations have tax free 501-c(3) status?

    “I assume you think this is okay.”

    Yes, and it should be fine for religious groups to have tax free 501-c(3) status too if they go through all of the hoops that other non-profits have to go through to get tax exempt status. The problem, as pointed out above, is that they currently don’t have to jump through those hoops and they get better tax benefits than other non-profits. Treat them the same as all other non-profits (including making them justify their non-profit status) and there will be no problem.

  • “The 2,300-member Christ Church insists that’s an outdated view of how churches operate”
    that gave me a good laugh. Aren’t churches based on outdated views?

  • Hypatia’s Daughter

    I have been the Treasurer of a small 501-c(3) for many years and file their taxes. The tax form requires you to split up income & expenses between activities that support you primary purpose & income from other sources. You have to calculate a 5 year ratio between these income sources to determine if the share from the latter is too high. If it is over a certain per centage, it would be taxed. Other sources would be interest, sales of products (like books & t-shirts, etc). It also asks if any money is spent on political activities. And our tax filing is a public record, available to anyone.
    Just make churches follow the same rules – especially making their tax records public.
    The dirty trick of churches is using them as a political forum. Anyone one can form a 501 to support a political agenda – “Baptists for Bush” or “Mormons for Mcain”. Claiming that their freedom of speech is being denied because a church cannot support candidates from the pulpit is a lie & a manipulation of the system.

  • SecularLez

    The state must be hurting really bad to considering taxing the business ventures of this church. I think if revenues were doing well, this church would get away with their business venture not being taxed.
    I say tax ’em!

  • Make all houses of worship and all non-profits (apparently others already have to and, yes, Robert, including Atheist ones) fill out returns reflecting income and outgo and pay taxes just like any other business if there is a profit.

    BTW, if they’re caught backing a politician or a party, report them to the IRS and Americans United for Separation of Church and State who act as a watchdog for that happy horseshit. They lose their tax exempt status if they do so. They can talk about issues but not endorse a candidate or a party.

  • bernerbits

    The state must be hurting really bad to considering taxing the business ventures of this church. I think if revenues were doing well, this church would get away with their business venture not being taxed.

    We’re actually doing pretty well compared to some other states, but we don’t have state income tax so the state has to take what it can get. Of course, sales tax is pretty ridiculous at 10%…

  • Nicole

    Have to second the ouch over the sales tax here. I used to work at a fast food joint and you could tell the out-of-towners from their sudden “does anyone have a dime?” when you rang up their 1.00 burger. 😛

    Also when this first came up I thought of the other, non-religious non-profits issue too… I didn’t realize the process was different for churches. If that’s the case that IS messed up and I withhold my previously-considered comment that we can’t really condemn one and not the other so…

    Condemn! Condemn!

  • Markus

    That settles it. I’m buying the gas station down the street and renaming it Ministry Mart. My tax exempt Holy Ethanol will crush the competition!

  • Jeff Ritter

    Christianity is not something you dive into once a week.

    Well there you go. Obviously Christians should never be taxed.

    Rich you beat me to it.
    And I agree with everyone saying the churches should follow the same 501 rules that all other non-profits follow. It would piss off a lot of the car dealerships in my area though, since pastors wont be buying new trucks and big cars every year! I do wonder though, could the American Italian Pasta Company here in KCMO be considered a Pastafarian Church? Wouldn’t the making of food products in the likeness of His Great Noodlieness be an “Outreach” program?

  • Heidi

    California should try this. It might solve their budget crisis. Plus it would be funny.

  • Sinfanti

    Just imagine how much we could cut the deficit if we removed tax-exempt status from religious organizations. If the religions really want to help society, they can start by paying their taxes like everybody else.

  • Pseudonym

    To those who have said that if we removed tax-exempt status from religious organisation the money saved could do some good: It must be nice to live in dreamland. Like the military-industrial complex is a good cause?

    Anyway. Treating churches under the same rules as non-profits is how it works in most countries, and it does work just fine. It turns out, believe it or not, that churches are no less trustworthy than any other type of NPO. Whodathunkit?

  • UltimateDelivery

    Nope, taxation is theft. I don’t think anyone should be taxed.

  • this is why i love you folks! you bring up answers and questions that I don’t know about but help me to do research and think about the issue.

    personally, i don’t think an religious organization should be tax exempt UNLESS they apply for non profit status like any other non profit group. that way, we know that they can follow the guidelines.

    i don’t know the tax laws for tennessee, so i really can’t speak on it. but its a good debate to have.

    i know that many of these megachurch pastors have refused to open their books publicly. i think that is a huge problem if it’s tax exempted.

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