States Move To Revoke Charities' Tax Exemptions

MercuryNews ^ | February 27, 2010

[Steelfish]

States Move To Revoke Charities' Tax Exemptions

Faced with steep declines in tax revenue, an increasing number of states and localities are considering eliminating various tax exemptions for nonprofit groups.

A bill before the Hawaii Legislature, for instance, would require charities to pay a 1 percent tax, and Kansas is considering making them subject to sales taxes. Revoking the nonprofit organizations' exemptions from property taxes is also under scrutiny in several counties in Kansas, as well as in Pennsylvania. And last fall, Minneapolis made charities subject to the fees it charges businesses and residents for streetlights in hope of gaining an additional $155,000, an exercise Jon Pratt, executive director of the Minnesota Council of Nonprofits, describes as "looking under the sofa cushions."

In most cases, churches would be exempt from the tax measures, but all other nonprofit groups, including private schools and colleges, would be affected. City and state officials say they have no choice. "We're having to look at the public services nonprofits use and how we can adequately cover those costs," said Matt Greller, executive director of the Indiana Association of Cities and Towns. "We can't give them away for free any longer." Nonprofit groups say the moves to wring revenue out of them are shortsighted and will produce cutbacks in critical services that governments rely on them to provide, like mental health and emergency foster care services.

[NoControllingLegalAuthority]

City and state officials say they have no choice.

Yeah, they couldn't possibly CHOOSE to cut government expenses to the level of government revenue.

[ComputerGuy]

The Founders exempted churches from taxes ?

[REPANDPROUDOFIT]

Charities must pay, but unions would be exempted from taxes on their CADILLAC healthcare plans! We live in an upside down world!

[REPANDPROUDOFIT]

They have to do something in order to pay for all those generous retirement packages. This is just a drop in the bucket compared to what is coming. I don’t think they will be able to tax us enough to pay for all the promised benefits.

[freeangel]

If the government cannot control you, you WILL pay a price.

[chainsaw]

One question. Does this post mean I can’t be given a tax exemption?

Are you black or white?

[Scotsman will be Free]

Tax ‘em all ‘til they squeal. Get enough pissed off people and things begin to change. Otherwise the exempt people either fight to retain the status quo or advocate for an increase in taxes on the rest of us to keep their ox from being gored.

[Dianer0839]

My neice bought a house in an upscale neighborhood and searched the internet for the owners of the house she had originally wanted. It was bought by Salvation Army and further research showed ownership of shopping malls and many homes in residential areas. We thought having temporary apartments for fire victims was a great idea but the location of the neighborhood tells a different story. Check out the local charities and the amount of property owned without paying taxes. I know they do good work but it concerns me that they have so much money to buy real estate yet continue to ask for pledges.

[Roccus]

“In many cases churches acquire prime commercial real estate...”

Trinity Church at Wall and Breadway in lower Manhattan holds vast tracts of commercial and residential properties throughout the financial district. They also own this little bit of NYC

http://www.trinitynyc.com/properties.asp

[Scotsman will be Free]

“...having to pay their fair share.”
Thats sounds so, so, well leftist.

[Roccus]

Breadway = Broadway

[NVDave]

To the short lists being bandied about, I would add:

Foundations. Especially foundations funded with charitable remainder trusts and similar tax-exempting vehicles. Pew, Packard, Ford, Carnegie, etc, etc. They’re utterly filled with liberal and socialist busybodies hiding behind their 501(c)(3) status.

At this point, I’d like to see all their monies seized. Every last dime of it. We’re talking 10’s of billions of dollars.

[steveab]

I remember went ALL Health Items were Tax deduct able Right down to band aids. The government giveth, the government taketh away.
For years, I have said that our current tax code should be scrapped and replaced with All sale tax system with no exception.
Follow the flow of money. As Consumers, when we purchase a good or service, we pay for ALL TAXES AND FEES related to that product or service. It's all built into the price.
As consumers and wage earners we are interested in our bottom line, OUR spendable income and OUR Freedom to spend OUR money.
It would eliminate a lot of “SPECIAL INTEREST GROUPS” and “BACK ROOM, CLOSED DOOR DEALS” in our “Capitals”.
It would make us aware of HOW MUCH MONEY governments are taking from us EVERY TIME we purchase a good or service. $1.00 cup of coffee would still be a $1.00. The recite would show $.50 Coffee. Local Tax $.05, State TAX $.15 Federal TAX $.30 total Tax $.50, Total $1.00
EVERY TIME I HEAR TAX THE RICH, I SAY THAK YOU FOR ERODING MY PURCHASING POWER.

[Swiss]

You are not reading what I intended to say.

I am in favor of fewer taxes not more but as long as we got groups who benefit from not paying taxes wanting more taxes for those who do then perhaps it is time to even the playing field.

Take the Catholic Church and illegal immigration. Illegals cause more taxes yet they benefit the Church by increased attendance and donations. Come Sunday the Church then preaches in favor of the illegals and helps them organize politically. Meanwhile my taxes goes up because of them, therefore it is only fair they suffer for their actions like the rest of us.

Yes non-profits provide a public good but in many times so does profit making outfits. Why exempt a non-profit hospital from taxes when they are charging people about the same as a for profit hospital or maybe even more. Why decide a classical orchestra paying it’s director $100,000 a year and musicians very good union scale should be non-profit while some jazz group pays taxes.

What I am seeing is more and more groups is jumping on the non-profit bandwagon while those who pays the taxes got to provide not only the funds to cover their own public services but the non-profits uses as well.

If a tax is fair then it is fair for everybody to pay, no exemptions. I bet property taxes would go down in this country when the churches realize they would pay more out if they supported it.

[Solitar]

All those “non-profits” and “charities” are exempt from sales taxes now.

Kids and parents and others who take vacations at “church camps” also can buy their supplies exempt from sales taxes.

The rest of us pick up the tab for providing police, fire, medical and highway services to them.

[Persevero]

As summarized in this article by the Alliance Defense Fund:

The U.S. Supreme Court stated in Lemon v. Kurtzman in 1971 that non-taxation of churches is undergirded by “more than 200 years of virtually universal practice imbedded in our colonial experience and continuing into the present.” Here is why: There is a distinction between constitutionally separate “sovereigns.” For one sovereign entity to tax another leaves the taxed one subservient to that authority. This is true both in the symbolic statement of paying the tax and in the practical effect of supporting the sovereign party. So, in our constitutional structure, states may not tax each other, and they may not tax property of the federal government. The District of Columbia does not tax the property owned by foreign governments, and New York does not tax the property owned by the United Nations.

So, too, churches in America are not subservient to the government. The First Amendment to the Constitution requires that “Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof.” The Constitution prevents the government from wielding its authority to control churches. Churches in this way differ from all other businesses and organizations. They are a unique institution whose existence is not derived from government authority, nor even from governmental acknowledgment. Churches preceded the birth of our nation and will remain long after its death. They transcend geographic and ethnic boundaries.

While the church is not subservient to the government, neither is the government subservient to the church. Although government can aid or support virtually all types of social or educational institutions which have a public purpose with the use of tax money, the Supreme Court stated in 1948 that “no tax in any amount, large or small, can be levied to support any religious activities or institutions.” Thomas Jefferson coined the highly referenced “wall of separation” between church and state (but not in the Constitution, as many people assume). The separation he referred to must be bilateral and reciprocal. Whatever the degree of separation required by the Constitution, it is surely this: the government may not make the church subservient by taxing its existence.

In Walz v. Tax Commission, the Supreme Court noted that the church’s “uninterrupted freedom from taxation” has “operated affirmatively to help guarantee the free exercise of all forms of religious belief.”

Remainder of argument, which reads very easily, here:

http://www.answerbag.com/debates/churches-tax-exempt_1855555