Actually it does. If the end consumer is the church, they must pay sales tax on the purchace of those services. Only if the church sells those services would there be no tax due. There would have to be an exemption in the bill to exclude churches from such a tax, and the bill contains no such exemption.
Show me.
Here is what I found:
SEC. 706. NOT-FOR-PROFIT ORGANIZATIONS.
`(a) Not-For-Profit Organizations- Dues, contributions, and similar payments to qualified not-for-profit organizations shall not be considered gross payments for taxable property or services for purposes of this subtitle.
`(b) Definition- For purposes of this section, the term `qualified not-for-profit organization' means a not-for-profit organization organized and operated exclusively--
`(1) for religious, charitable, scientific, testing for public safety, literary, or educational purposes;
`(2) as civic leagues or social welfare organizations;
`(3) as labor, agricultural, or horticultural organizations;
`(4) as chambers of commerce, business leagues, or trade associations; or
`(5) as fraternal beneficiary societies, orders, or associations;
no part of the net earnings of which inures to the benefit of any private shareholder or individual.
`(c) Qualification Certificates- Upon application in a form prescribed by the Secretary, the sales tax administering authority shall provide qualification certificates to qualified not-for-profit organizations.
`(d) Taxable Transactions- If a qualified not-for-profit organization provides taxable property or services in connection with contributions, dues, or similar payments to the organization, then it shall be required to treat the provision of said taxable property or services as a purchase taxable pursuant to this subtitle at the fair market value of said taxable property or services.
`(e) Exemptions- Taxable property and services purchased by a qualified not-for-profit organization shall be eligible for the exemptions provided in section 102.
And in Section 2 of definitions we find:
`(12) TAXABLE EMPLOYER-
`(A) IN GENERAL- The term `taxable employer' includes--
`(i) any household employing domestic servants, and
`(ii) any government except for government enterprises (as defined in section 704).
`(B) EXCEPTIONS- The term `taxable employer' does not include any employer which is--
`(i) engaged in a trade or business,
`(ii) a not-for-profit organization (as defined in section 706), or
`(iii) a government enterprise (as defined in section 704).
And further:
`(14) TAXABLE PROPERTY OR SERVICE-
`(A) GENERAL RULE- The term `taxable property or service' means--
`(i) any property (including leaseholds of any term or rents with respect to such property) but excluding--
`(I) intangible property, and
`(II) used property, and
`(ii) any service (including any financial intermediation services as determined by section 801).
`(B) SERVICE- For purposes of subparagraph (A), the term `service'--
`(i) shall include any service performed by an employee for which the employee is paid wages or a salary by a taxable employer, and
`(ii) shall not include any service performed by an employee for which the employee is paid wages or a salary--
`(I) by an employer in the regular course of the employer's trade or business,
`(II) by an employer that is a not-for-profit organization (as defined in section 706),
`(III) by an employer that is a government enterprise (as defined in section 704), and
`(IV) by taxable employers to employees directly providing education and training.