If it taxes them, it taxes only on items that are purchased. Currently tax exempt organizations are allowed to purchase items tax free at the state level and I don't see that [portion changing. A good portion of a church's budget is towards missions and salaries.
And under the fairtax, church's would have to pay a 30% tax on those salaries as the consumer.
If it taxes them, it taxes only on items that are purchased.If they sell cakes at a bake sale or have a bingo game they have to remit 23% of the gross.