New US tax law could extract $1.7 billion from churches over ten years

New US tax law could extract $1.7 billion from churches over ten years November 16, 2018

The Ethics & Religious Liberty Commission (ERLC) of the Southern Baptist Convention has called ‘foul’ over a new tax law that squeezes churches and nonprofits to the tune of around $1.7 billion over a decade.

The commission, part of a coalition of some 32 faith-based organisations, sent a letter to Congress, demanding the repeal of a provision in the new Tax Cuts and Jobs Act that will force churches and other historically tax-exempt organisations to file federal and likely state income tax returns on parking benefits.

ERLC President Russell Moore, above, lamented:

Churches ought not be seen by the government as untapped sources of tax revenue. While the effect this section of the tax code may very well have been unintended, it must be remedied. As the American founders clearly understood, the power to tax is the power to destroy. The proper separation of the state from the church is at the heart of our American project. This section of the tax code, however, blurs those lines in harmful ways.

While churches have long been subject to file IRS Form 990-T as long as they generate unrelated business income, the new law, Section 512(a)(7), will now require many more churches and tax exempt organisations to file the form because the federal income tax is now applied to parking benefits.

In the letter sent to members of Congress, the coalition said:

Whatever purpose Section 512(a)(7) was intended to serve cannot justify extracting $1.7 billion in taxes from nonprofits and houses of worship … While the organisations and houses of worship will pay these taxes, it is the people they serve who will ultimately suffer from this massive diversion of funds from civil society to the government. We believe these impacts from Section 512(a)(7) were surely unintended and unanticipated. We therefore call upon you to repeal Section 512(a)(7) through any appropriate legislative package before the end of this calendar year,

Earlier this summer, the Evangelical Council for Financial Accountability also launched a campaign to repeal the new tax noting that it would also create significant administrative challenges for some small churches.

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  • barriejohn

    “Render to Caesar the things that are Caesar’s.” (Mark 12:17)

  • ephemerol

    And what’s more, the specifics of the passage seem to indicate that currency in general, issued by the mint, is one of caesar’s things.

  • ephemerol

    The proper separation of the state from the church is at the heart of our American project.

    LMFAO, oh, now he wants separation of church and state???

    As the American founders clearly understood, the power to tax is the power to destroy.

    Say what? So the federal, state, county, and municipal governments have been destroying businesses and citizens all this time?

  • Raging Bee

    Yeah, not sure what Jesus would have said if that guy had shown him a Greek coin with, say, a goddess or some other long-dead king on it…

  • TheBookOfDavid

    Families and small businesses are acceptable losses. But when you hold our all-powerful creator to the same standards, that’s a step too far! You make Baby Jesus cry.

  • Broga

    I think that is unfair. They should be giving the churches money to pay for them praying that super Christian Trumprunsfromrain ( ancient and revered Cherokee chieftain who will be familiar to Native American readers) is doing God’s work and fucking up not just the USA but the rest of that continent. Canada has taken avoiding action. Is Trump’s wall up yet? I ask, because I have just hammered in fence posts and it is hard work. However, I would be open to working on the wall with adequate recompense. I can bring my own tractor fitted with a thumper to bang in the posts. That must be attractive to an expert in forestry like the President.

  • Jim Jones

    Churches should be taxed on the same basis as country clubs.

  • Brianna LaPoint

    Christians think they are above the laws of the land, Ive seen enough would be theocracts to say, You have it coming. The minute you decide what is right for other people is the minute you deserve to be taxed.

  • Dax Williams

    I don’t know where I read it but weren’t they in favor of the bill when they thought it was aimed at Planed Parenthood and other non profits that benefited the poor and women