No tax relief yet from Congress for churches

"Congress has failed, to this point, to heed the latest urgent request from a coalition led by the Southern Baptist Ethics & Religious Liberty Commission to rescind a provision in federal law requiring churches to file tax returns for the first time in American history." - BP News

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Aaron Blumer's picture

EditorAdmin

Some more details...

The provision -- Section 512(a)(7) of the Tax Cuts and Jobs Act of 2017 -- requires houses of worship and other nonprofits to pay a 21 percent tax on such employee benefits as parking and transportation. The measure, which took effect Jan. 1, 2018, will cost the charitable sector an estimated $1.7 billion over 10 years, the ERLC-led coalition said in the letter. Opponents of the provision also have said it will burden churches and others with accounting and compliance costs not previously required.

Dave White's picture

https://www.politico.com/story/2018/12/16/congress-tax-reform-irs-church...

Under the Tax Cuts and Jobs Act, the parking benefits that churches, synagogues, hospitals, colleges and other nonprofits offer their employees are now taxable. That’s causing headaches for nonprofit administrators trying to figure out complicated new rules that can require them to calculate everything from snow removal costs to what percent of spaces are used by employees. It will likely all end up with pastors losing their reserved spots and competing with the congregation for parking before services.

“All over America — it’s no longer going to say, ‘This space reserved for Pastor Smith,’” predicts Steven Woolf, senior tax policy counsel for the Jewish Federations of North America. “Those signs will be coming down.”

One likely effect of the new rules: a lot fewer reserved spaces. Under the new rules, dumping assigned parking spots is one way a group can reduce its exposure to the tax.

 

Bert Perry's picture

I'm wondering if there might be real hardship in urban churches built before Henry Ford got going, the kind where you've got 5-10 spaces that are just about enough for the staff, but nowhere near enough for the whole congregation.  And if you remove the signs, every commuter takes those spots and your staff is taking a big hit out of fairly meager budgets paying for public parking.

Couple that with cities building renewal efforts around single hipsters instead of families, and churches are going to be in for a world of hurt trying to pay heating bills in old masonry buildings in cities with 30% fewer residents than they used to have.  Or a third, as is the case in Detroit or Gary.

Aspiring to be a stick in the mud.

TylerR's picture

Editor

Plan to lose all tax protections as a pastor. It might also be a wise move to plan to lose tax protections for churches within the next 30 years, or so. The writing is on the wall.

Tyler is a pastor in Olympia, WA and an Investigations Manager with a Washington State agency. He's the author of the book What's It Mean to Be a Baptist?

Jay's picture

The State is becoming more money-hungry and looking harder at the NPO/Charitable sector, both in terms of financial practices and as a potential revenue stream.  Combine that with the fact that Christians no longer enjoy their place of privilege in society, and we can argue, are becoming more targeted for 'not getting with the programs'.  Our tax exemptions will be (eventually) going the way of the dodo - do not bank on them in the future.

A local church I used to be part of didn't pay taxes - so the town assesses 'fees' instead.  Semantics, but with a bite.

"Our task today is to tell people — who no longer know what sin is...no longer see themselves as sinners, and no longer have room for these categories — that Christ died for sins of which they do not think they’re guilty." - David Wells

Bert Perry's picture

One of the chief catcalls of secularists regarding religious people participating in politics is "if they participate, they need to pay taxes".  So if we're exposed to some of the property taxes and such that we're not currently paying, that could end up being surprisingly a bonus.

The big difficulty I can foresee is that it's hard to valuate a church because there aren't that many other uses for those buildings.  It would also lend itself to abuse, as if you had a secularist assessor, he might just "nudge" those valuations higher.

Long term, even if I were trying to keep an urban core church alive (again, no easy task), I'd love to get rid of a lot of the "little" exemptions if we could greatly simplify and reduce the overall tax.  As Jay notes, however, I am dreaming, obviously. 

Aspiring to be a stick in the mud.