Why Are Churches and Religious Organizations Tax-Exempt?

A church steeple.

In the wake of the Obergefell same-sex marriage ruling, political and cultural opposition to religion has ramped up, with some calling for the revocation of tax-exempt status for religious entities. In light of those demands, let's take a look at why tax exemptions for religious entities exist, and why they should remain in place.

There Are Social Benefits For The Common Good

Churches and religious organizations, like other charities, provide a social benefit to society. They minister to the needy and poor in their communities, and they provide an influence on society that helps to reduce crime and encourage good citizenship. The links below are to articles and information that quantify some of the benefits that churches provide:

(These articles point to studies by Ram Cnaan, a University of Pennsylvania researcher, who describes himself as "nonreligious." One study notes the average urban church in Philadelphia provides over $476,663 worth of services annually. And an illustration of Cnann's work in Christianity Today shows that one particular Philadelphia congregation's annual give-back is valued at over $6 million.)

The Separation of Church and State Is Maintained

Making churches and other religious organizations tax exempt is the cleanest way to avoid government entanglement with (and exercising undue influence over) religion, which is prohibited by the First Amendment's Establishment Clause."Congress shall make no law respecting an establishment of religion…" As Chief Justice John Marshall stated back in 1819, "the power to tax involves the power to destroy." Keeping churches tax exempt removes the temptation from government to interfere with the free exercise of religion"…or prohibiting the free exercise thereof." guaranteed by the First Amendment. In 1970, the U.S. Supreme Court held that property tax exemptions for churches were in keeping with the Establishment Clause of the First Amendment. (Walz v. Tax Commission)

Churches Would Close

Many small churches cannot afford to stay open without the benefits of tax-exempt status. From encouraging donations to having enough income to pay the pastor's salary, those familiar with the finances of small churches know that losing tax-exempt status would spell the end for many churches operating on a shoe-string budget. In small towns across America, where small churches are the norm and central to community activities, this could mean depriving some populations any organized churches whatsoever.

Tax Exemption Is a Founding Principle

By the time of the American Revolution, nine of the original thirteen colonies were giving some kind of tax relief to churches. The idea can be traced back to Roman times when Emperor Constantine granted the Christian church a complete exemption from all forms of taxation.

You can find additional information here:

Finally, a quote from a recent blog by Amy K. Hall sums up the powerful influence a strong faith-based community can have on a city:

If you doubt the value churches bring to communities, you need only look at the aftermath of recent tragic events in Baltimore and Charleston. What made the difference between rioting and mass hymn singing? The churches. The difference they made and will continue to make in Charleston is the kind of invaluable good the government cannot provide.

In summary, tax-exempt status for churches and religious organizations serves a continuing social benefit to American society, and is consistent with our country's commitment to keep the government from unnecessary entanglements with religion. It is a policy that is in keeping with the best social and constitutional traditions of this nation.