That's probably why L. Ron Hubbard started Scientology.

I believe there was a time when churches in the U.S. had to pay taxes. The U.S. tax code specifically states that churches are only tax exempt as long as are not politically involved.

Umm, they do not have to file, so nobody knows what/where the money they have is doing. Some churches hold extensive real estate, income- producing properties, to mention just one thing.

@AnneWimsey I think they do have to file.

[journalofaccountancy.com]

I support strict oversight to make sure that employee compensation is properly reported.

Nonprofits don’t pay taxes on their investments, but they do pay taxes on the profit of unrelated side businesses:

[nolo.com]

@WilliamFleming Okay, so a Thrift Shop run by a Church gets donations made for FREE and THEN SELLS those donations ergo it IS an Income and should, by law, be taxed as an Income.
Yet they DO still pay no taxes upon that self-same INCOME earned from the goods they received for free BUT sold for a COMPLETE PROFIT.

Is that NOT simply a LEGALISED form of Tax Evasion?

@Triphid Well yes, but who is it that is benefiting from that income? Who profits? No one. The money goes to pay employees, who do pay taxes, or it is used to otherwise benefit society.

Thrifts shops also are of great benefit, especially to low-income people. Would you tax them so their goods would cost more, and then pay welfare to the people? Nothing is gained by the intrusion of government.

@WilliamFleming Err, in the case of the St. Vincent De Paul Thrift Shops it IS the Catholic Church gaining a 100% profit since ALL those working in those shops ARE 100% Volunteer Staff anyway.

@Triphid I think I read that in the US churches do pay taxes on sideline businesses unrelated to the religion.

There would be other expenses to operating a thrift shop than labor. It’s an interesting question as to whether a thrift shop should be taxed if it is benefiting the public. People donate things, and their time for the benefit of the public, and any leftover money is used by the church for various purposes, but mainly to maintain the organization. Without the organization there’d be no thrift shop. If individuals profit they of course should be taxed.

I lean toward thinking that the thrift shops are primarily for public benefit and should not be taxed. Compare to the Food Bank. They take in donations of food and money and volunteer labor. Extra money is probably used for infrastructure maintenance, and of course they have some paid employees who get taxed. No one is clamoring to have the Food Bank taxed because they benefit the public.

@OwlInASack if you are an accountant you know a lot more about it than I do. However, it seems unreasonable to me that organizations should be taxed as a group and again as individuals for whatever they gain from the group. That is especially true for public benefit organizations. I just made a modest donation to the Food Bank. Do you think part of that should be taxed? I can understand property taxes where there is a building and the group benefits from police, roads, utilities, etc.

What if, instead of being incorporated, a church formed a large partnership. As a group I assume there’d be no income taxes, and very few of the partners would receive anything to tax. In fact most of them would have a loss.

Nonprofits pay no federal income tax. Not all nonprofits are charitable organizations. How about the YMCA, your local credit union, your labor union? The list goes on and on.

@WilliamFleming But do they pay other taxes and fees such as property tax?

@MizJ I don’t know. I suppose that would depend on local laws.

By the same logic you’d have to tax the damn credit unions, the damn labor unions, the damn Elks Club, etc.

@WilliamFleming But, here in Australia Credit Unions, etc, DO pay taxes, Credit Unions MUST pay Financial Institutions Taxes, Churches, the YMCA, etc, do NOT.