GaryP

I have read and/or heard that some big churches branch out into other areas such as owning a restaurant.

If this is true, are those places of business tax-exempt also?

ImGod

Here are my personal experiences from being on the building committee for my old church. When we joined it was a small church of 100 people. In 6 years it became the fastest growing mega church for the United Methodist church.

First expansion on site.
-Land acquisition; $1,500,000
-Church expansion budget; $3,000,000
-Cost overruns due to spike in membership; $6,000,000
-3 capital campaigns to raise the minimum capital to secure loans.
-Additional mortgage payment on expansion $11,000 per month.
Results, 10,000 per month attendance, 5,000 members. Full to capacity within 1 month after completion.

Second expansion plan to accommodate new membership.
-Private group of investors from the church formed Limited Liability Corporation (LLC) and sold investment bonds with active support of the church. $10,000,000 raised to buy the commercial strip bordering the church. 2 acres donated to the church to redirect the access road and provide an entryway. The commercial property layout and rental agreements were modified to allow the church to use parking lots on Sundays.
-Capital campaign started to raise the minimum to secure an initial $40,000,000 loan for a new building with seating for 5,000.

The yearly operating budget for the church was around $8,500,000 when we left. There was a staff of 165 people.

The last time I looked at the budget breakdown, 25 percent went to mission work.

All giving for capital campaigns or charitable activities were supposed to be above and beyond the normal giving for yearly budget purposes.

Here is what they were able to do last year.

-300 Children were sponsored through Compassion International
-5,000 Sack lunches to Westport Neighbor 2 Neighbor
-1,000 Angel Tree gifts provided to children of prisoners
-500 Homeless people served Thanksgiving Meals
-400 Homeless served on Christmas Eve at Westport N2N
-Tons and Tons of clothing delivered to area clothes closets
-Tons of food has been provided to local food pantries
-$82,000 donated to Share the Warmth for low-income utility assistance
-1,004 hours building homes for Habitat for Humanity
Helped build 16 homes for Habitat for Humanity
-100 backpacks filled with school supplies were given to kindergarteners in the Kansas City School District
-Tons of notebooks, paper, pencils, glue, erasers, notebooks, pencils and pens were given to local agencies for children needing school supplies
-COR sponsors Boy Scout Troop 92
-Collected 27 tons of food for Super Bowl Sunday, to stock local pantries
-More than 300 pints of blood collected at last blood drive; COR is one of city's largest

In my opinion a very low cost to benefit ratio even if you happen to be a member. The money raised and spent per year should be able to buy more assistance than that listed above.

For a view of the "God's Plans" click below. Note: I helped with the building between the two at the right hand side of the picture. The $40million building is the building to the right of the steeple not the big one. The highlighted one on the site plan. The main sanctuary will probably be in the $100 million range and seat 10,000.

http://www.cor.org/devsite/images/pi...erall-Site.jpg

Now consider that is one church in one area of the country.

copernicus

It is important to remember that many small churches would go under if they had to pay property taxes. Basically, the cost to the average taxpayer is that they all have to fund all of the government services that property taxes normally go to support. Hence, citizens pay taxes to subsidize religious activities in their communities, despite the so-called protection of the First Amendment. The majority of citizens support such subsidies for religion, and the Supreme Court has declared them exempt from First Amendment protection. So enjoy your local church. Your tax dollars at work.

nogods4me

Indeed it is troublesome. During a recent series of budget shortfalls here in Baltimore, the Mayor made a statement that 30% of all land in the city limits was owned by non-profits, now I am sure that does include some universities and colleges and some hospitals as well, but also very many churches.
So with the non-prof's not footing a fair share of the property tax, the burden is significantly higher for the private sector, and since one of the methods used to lure business to the city is credits against property taxes, once again the private citizen and small businesses get hit with a disproportionate share of the tax burden.
I say tax them. If a church, or other non-prof, cannot survive, too bad. The property can always be used for something else. At least the businesses that get the tax breaks are bringing jobs to the city and increased revenues from income and sales taxes.
Of course some of the non-profs will threaten to leave the city, and so we are stuck paying blackmail in the form of tax exemptions to keep them here. It is a nasty situation all around. Someone should have smacked the first person to suggest these exemptions.

PopeInTheWoods

I'm not sure there's a good answer to this problem. Taxing all non-profits would have a chilling effect on the services available to those facing economic hardship, especially since government programs are being squeezed as well. But treating churches differently would seem to present Constitutional issues. In fact, I might argue that, since I see the power to tax as the power to destroy, the Free Exercise Clause would prevent any taxes on any religious organizations.

Maybe something like Puck's suggestion would be best. Or maybe some sort of auditing formula that measures the percentage of community services to total income would work. What sort of oversight exists for the financials reporting of religious and other non-profits? Given the recent corporate finance scandals, I'm guessing not much. But those bastions of morality that are the religious organizations of the USA wouldn't take advantage of that, would they?
Again, I think religious groups must be treated the same as other non-profits. But then I've never seen United Way bigwigs have to brown-bag their lunches either.

Andy

copernicus

You could argue that, but it has no basis in law. The original Supreme Court ruling in favor of religious exemptions (a 5-4 squeaker) argued that the exemption was not constitutionally required, but that it was permissibile. And they let the exemption stand on the very questionable ground that exemptions are not the same as subsidies. Governments are not supposed to give money directly to churches, but they can provide religious institutions with free tax-supported government services.

Also, let's not forget that churches do enjoy a special status with respect to real estate taxes. The federal laws governing exemptions for non-profit income (401(c) 3 and 401(c) 10) are governed by explicitly non-religious criteria. State property tax exemptions are governed by a different set of laws that do not necessarily exempt all non-profits. In the case of the Arizona ministry that was denied a property tax assessment, the ministry went to court on the grounds that it was entitled to an exemption qua religious organization, not non-profit organization. The state argued that it could apply the same non-profit criteria to property taxes that the federal government did. This is a very controversial area of the law, and some religious groups are moving ahead aggressively to remove secular restrictions on them.

BadBadBad

Our Baptist church built a beautiful new church right on the new thoroughfare that is to be the centerpiece of our community. I always wondered how it was funded, how that happened, and what the true cost of that church is to our community. Someone here pointed this out to me. Read this article and see if you can tell what the true cost is.

See here for a complete explanation:

http://www.au.org/churchstate/cs3004.htm

Basically, it appears they followed the ultra-right agenda to the T, corrupted the government, and used it to scoop up valuable property based upon inside information. Now instead of having tax revenue for this prime commercial/retail realestate, we have a beautiful new church. I even got to go to the sermon and praise God with the minister over the success of their new church.

Truly, let's all Praise God!

Toto

That was written in 2000. Scarborough has founded Vision America , where he continues to insist that the founders did not intend a real wall of separation between church and state, and other items on the Religious Right's agenda. He has also taken over the reins of the Moral Majority from Jerry Falwell and is preparing a nationwide campaign to turn the evangelican chuches of American into a political machine. His national advisory board includes Jerry Falwell, Ronnie Floyd, D. James Kennedy, Tim LaHaye, Tim Lee, Peter Marshall, Dan Patrick, Paul Pressler, Adrian Rogers, Paul Weyrich, and Don Wildmon. His voter guides, of course are nonpartisan as they should be for a tax exempt organization.

BadBadBad

Hold on while I puke!