Nashville Church Fights $425,000 Tax Bill

[DeSwiss]

Nashville church fights $425,000 tax bill
Cafe, bookstore, gym called retail, are not exempt

By Bob Smietana • THE TENNESSEAN • November 21, 2010

A South Nashville megachurch facing a $425,000 property tax bill is fighting the assessment on its gym, bookstore and cafe. The Tennessee State Board of Equalization, which decides tax exemptions for churches, contends those are commercial enterprises, so the portion of church property they occupy can be taxed.

The 2,300-member Christ Church insists that's an outdated view of how churches operate, and those enterprises should be considered part of ministerial outreach. "They think a church worships on Sunday and then everybody goes away," pastor Dan Scott said. "Anything else you do is not church. But Christianity is not something you dive into once a week."

But the question of who can decide which parts of a church are religious and secular is drawing national attention, with some calling it a First Amendment issue. Christ Church shut down its cafe and bookstore and handed off its gym to the YMCA of Middle Tennessee this year as the dispute dragged on, moves meant to keep the tax bill from increasing.

The trouble began in 2004, after Christ Church built Hardwick Activities Center, a 110,000-square-foot addition to its building at 15354 Old Hickory Blvd. Because of the addition, the church needed to reapply for its property tax exemption. In 2007, the Board of Equalization granted the church's request. But it excluded the bookstore and gym, which make up about 12 percent of the building, despite the church's insistence both were used in ministry.

The bookstore was too much like a commercial store, the board ruled. And because the gym charged membership fees, it was considered a business, not a ministry. Christ Church appealed the board's decision twice, once to an administrative judge and then to the board's appeals commission. On Oct. 8, that commission admitted the church could have religious motives for running a bookstore and gym but reiterated that doesn't justify a tax exemption.

http://www.tennessean.com/article/20101121/NEWS01/11210372/Nashville+church+fights++425+000+tax+bill">MORE

- Upon this rock gym, bookstore and cafe I'll build my church just doesn't have the same ring to it, eh?
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DeSwiss






"You can't teach an old dogma new tricks." ~ Dorothy Parker

[ixion]

1. Churches are a business, and a shady one at that. They should be taxed like any other

business, and in fact should have to pay a special tax because of all the whackos they produce.

[DeSwiss]

2. Whackos???

"Yes, my hair stylist is from Australia, what of it?"


- Do you think they should pay on a per whacko or a percentage basis???

[ixion]

12. a percentage would be fine

:toast:

[liberal N proud]

3. If they are making a profit, they should be paying taxes

The tax exemption was for non-profit organizations.

[DeSwiss]

4. For what would it profit a man to gain the whole world.....

...and to lose his gym membership?

[beyurslf]

5. they charge a gym membership? Sounds like a business to me.

[DeSwiss]

7. Which they will now forego....

...by handing this "not-a-business-enterprise" over to the YMCA of Middle Tennessee. Of course it'll still be attached to the church, and used by the church's members. But they'll most probably avoid paying taxes on the gym now since the YMCA qualifies as a 501 (c) 4 tax-exempt charitable enterprise. Sneaky little devils, aren't they?

- Now if they can just figure out how to convey their cafe over to Cracker Barrel and get them to offer church members free meals, they'll be set.

[starroute]

6. If a non-profit hospital has a gift shop in the lobby, that is taxable

The standard is not whether the business is connected with the non-profit function but simply whether it's run as a business and makes money.

To say that churches come under a different standard from any other non-profit would be to make an establishment of religion, which is unconstitutional.

Religions get as many privileges as they do only by being lumped in with other charitable organizations. For them to start arguing that they should be granted even more privileges that are not available for non-religious organizations puts them on very shaky ground.

[DeSwiss]

8. The truth....

...and doing what's right has never stopped religion from pushing the envelope before. In fact, it's those attributes that has made them what they are today.

- A blight and a pain in the keester......

[jemelanson]

9. Churches should not be exempt from property tax.

If churches are exempt from property tax, then the rest of that community, city, county, ends up covering that amount to pay for the things that the property tax is levied to pay for....it ends up that the increased amount that has to be picked up..is in effect a tax levied to support that church...which is prohibited by the constitution....so the exemption of Churches from property tax is un-constitutional....


This in not a popular position...but I stand by it....think about it.

[DeSwiss]

10. I agree with your position.

So it's popular with me. :)

[skepticscott]

11. Well, you'll only find about 3 people on this board

to disagree with you. The only question is whether they will crawl from under their apologist rock to float a lame argument in defense of public support of stained glass windows and choir vestments.

[Igel]

13. This is just property tax.

Interesting, this.

I was involved with an unincorporated non-profit once--there are still one or two around the country. It had fairly large sales, but was exempt from certain kinds of taxes. Income tax, for example, but only on part of its sales. Property tax, too.

It had been formed by students to provide services to students. So it had a bookstore, cafe, various other enterprises. Basically it was a co-op that grew and had additional bits grafted onto it. So if you ordered coffee you were asked, "Are you a student?" Yes, it was rung up one way and the income wasn't taxed; no, and the organization paid tax on the income because it wasn't service provided by a co-op to co-op members.

Much of the territory was used in for-profit services with taxable income, but the exact same territory was also used to provide non-profit services with tax-exempt income--so its territory had always been considered tax exempt.

From time to time they were audited, if only because it was a bizarre little entity, a non-profit dating to before the tax code was written in the way it is and which had never converted over to any 501(c)(anything) because it suited it to remain in a kind of state of perpetual legal fuzziness. Then they had to show that they clearly separated taxable from non-taxable income, and that most of the transactions served the co-op members (not "most of the income was from co-op members").

Prior to that I worked for a non-profit, a "traditional" 501(c)(3) church. On rare occasion we charged for something: We'd sponsor a dance, for example, and charged church members admission. Not taxable. Then again, while the church may have "made money" on it the church was still a non-profit and didn't do "profity" things with the money.

After that I taught English at a religion-based community center that *did* have a gym, meeting rooms, a daycare center, and cafe--no bookstore, IIRC. It, too, was non-profit and paid no property taxes, even though I certainly couldn't afford a gym membership and thought their cafe was overpriced; I don't think there was any "membership" required for using the facilities apart from a receipt saying you paid your fees. Still, the money went into upkeep as well as social-service/religious activities. For example, providing transportation to and from the English classes for immigrants. It was a fairly good non-profit, it engaged in outreach and sponsored community activities and generally did good works. Even the "stuff" available for people not in the center's target audience had to put up with religion-based constraints, closing on certain days of the week or year, dietary restrictions, etc., etc. Not my religion, but the only other kind of organization that would do this kind of thing would be governmental or educational; if education, it, too, would be non-profit, and if governmental it would have used taxes and not been so assiduously maintained or generously supported, it would have been subject to all sorts of political pressures, and probably would have served some community other than the one that this center served.

[DeSwiss]

14. The State of Tennessee.....

...has no income tax. It is constitutionally prohibited. Thus property and sales taxes along with a plethora of "user fees" abound. Making for a very regressive tax situation here. And in Nashville in particular, we have all sorts of exempted properties from Vanderbilt University to the Baptist Sunday School Publishing Board. So the state Board of Equalization who oversee the taxing of commercial properties tends to be very exacting about what qualifies not to be taxed.

BTW, I know coops. I manage a not-for-profit, low-to-moderate income housing coop. And we pay the commercial property tax rate just the same as the for-profit housing businesses do. We get no breaks. And our property taxes have increased by over 88% since we began operation in 1989.