Faith

Denominations Join Forces to Battle New Tax on Churches

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Setting aside long-standing theological differences, a diverse coalition of faith groups is lobbying Congress to rescind a portion of the Tax Cuts and Jobs Act. Section 512(a)(7) requires non-profits, including churches, to pay a 21 percent tax on employee benefits, including reserved parking spots. In short, if your church has a parking spot reserved for your pastor, that parking spot is now taxable. According to the letter sent by the coalition headed by Russell Moore and the Southern Baptists’ Ethics & Religious Liberty Commission (ERLC), the added taxes will cost non-profits around $1.7 billion over ten years.

The ERLC’s press release reveals that the letter delivered to members of Congress was signed by over thirty different religious organizations and leaders. “Signatures came from leaders of diverse faith backgrounds and a broad range of institutions, including houses of worship, primary and secondary education, higher education and faith-based nonprofit organizations serving communities around the country and around the world,” the letter read.

Alongside other notable religious leaders, the letter was signed by Gérald Caussé, presiding bishop, The Church of Jesus Christ of Latter-day Saints; Jerry Silverman, CEO, The Jewish Federations of North America; Leith Anderson, president, National Association of Evangelicals; Nathan Diament, executive director for public policy, Union of Orthodox Jewish Congregations of America; and His Eminence Daniel Cardinal DiNardo, archbishop of Galveston-Houston and president of the United States Conference of Catholic Bishops. When Evangelicals, Catholics, Mormons, and Jews band together, you know that Congress has overstepped its bounds.

The ecumenical letter warns Congress that:

This significant change in the treatment of charitable organizations will require many nonprofit organizations to file federal Form 990-T and pay federal taxes on the cost of parking and transit benefits provided to their staff.

Whatever purpose Section 512(a)(7) was intended to serve cannot justify extracting $1.7 billion in taxes from nonprofits and houses of worship within just 10 years.

ERLC’s president Russell Moore is even more blunt:

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.

Addressed to Sens. Orrin Hatch, Kevin Brady, Ron Wyden, and Richard Neal, the letter calls for Congress “to repeal Section 512(a)(7) through any appropriate legislative package before the end of this calendar year.”