Question of the Day?

by Joel on May 28, 2006

Should churches be exempt from paying state and local sales tax? That’s my qestion of the day. In Oklahoma, churches may apply to the state to be exempt from sales tax. The exemption doesn’t extend to instances where a church engages in certain business-type transactions in the manner of a for-profit entity , but does apply to routine purchases, be it for copy paper or a new computer. In neighboring Arkansas, churches are not exempt from sales tax. As our church shops in both states, we pay sales tax on some purchases and not on others. In Oklahoma, at least, churches do pay some use, tourism, and similar taxes.

On the one hand, solid arguments may be made that the charitable benefits of a church to the community outweigh the loss of revenue. It may also be argued that taxing churches is an assault on the U.S. Constitutional provision for freedom of religion. (Not exempting churches from the property tax could keep some churches from locating in certain areas.) On the other hand, churches are the beneficiary of many city and state services, such as roads and sewers, police and fire protection, etc.

For this post’s comments, I would invite you to offer additional and/or expanded arguments regarding exemption and I would also ask that you address both sides of the issue. You may give your conclusion as to which is the more correct position, though.

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1

J 06.06.06 at 1:44 am

I’m surprised no one has bitten on this one - I’m guessing this issue only applies to US readers, but correct me if I’m wrong there.

I think the status quo is best here in the states, not because the church should get government services for free, but because a church that became a significant revenue source for any government entity would present an overwhelming threat to the establishment clause, albeit not openly. Think cigarette taxes, but without the vice component that makes smoking relatively easy to attack (for non US readers, tax revenues from cigarette sales in the US dwarf tobacco company profits, which are pretty big themselves).

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