Church Businesses Should Be Taxed

Christ Church Pentecostal of Nashville is a large church -- with over 2,000 members and a property valued at $2 million. As with all churches (and other religious meeting places), the church enjoys a tax-exempt status -- and this is only fair, since all religious institutions should be treated equally. But this church went a little further, and created two profit-oriented businesses (a fitness center and a cafe/bookstore).

The church thought those businesses should be tax-exempt also, since they were owned by the church. They were wrong. The Tennessee State Board of Equalization ruled that the entire property should not be tax-exempt, since the two businesses were not used for religious activity (but were commercial enterprises). With the aid of the Alliance Defending Freedom, the church appealed the decision.

Now the appeals court has ruled -- and their ruling was against the church. The appeals court said the state taxation laws did not "interfere with or suppress religious activity" and did not violate the Constitution. The truth is that there is no constitutional right for churches to be exempt from taxation. That exemption is a legislative one and is not absolute -- especially when it comes to church-owned commercial enterprises.

The decision was a good one. When the church created these businesses, it went into direct competition with other businesses offering the same goods/services. To give the church businesses a tax-exempt status would be to give them a substantial financial advantage over their competitors (who must pay property taxes, business taxes, incomes taxes, etc.). It would have put the government in the position of giving one business an advantage it doesn't give to other similar businesses -- and the government should never be put in the position of favoring any business over others (even one owned by a religious entity). This is a matter of fairness and equal opportunity -- not religion.