Exemption or Exception Churches are Protected not Promoted by the Constitution
Could the argument be made that a church need no exemption because rather than needing an exemption it is the exception to taxation under the 1 st. Amendment and common law?
Yes, a strong argument can be made that churches do not actually need tax-exempt status (such as 501(c)(3)) because they are already inherently have an exception from taxation under both the First Amendment and common law principles.
- The First Amendment Argument
The First Amendment of the U.S. Constitution states:
“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof…”
From this, two key arguments arise:
A. Taxation as a Violation of Religious Liberty
• If the government taxes churches, it is regulating them, which could be seen as an interference with their “free exercise of religion.”
• Taxing a church could give the government leverage over its practices, which contradicts the principle of religious autonomy.
B. Taxation as a Form of Establishment
• By offering tax exemptions through 501(c)(3), the government conditions the church’s freedom on compliance with its rules (e.g., limiting political speech).
• However, under the Establishment Clause, the government is not supposed to have any role in church governance.
• If churches by default cannot be taxed, then exempting them is unnecessary—it would be like saying “we officially declare that free speech is not subject to a government fee.”
Thus, some argue that churches are not “exempt” from taxation, but rather “immune” to it by nature.
- The Common Law Argument
Historically, under English common law, churches were seen as separate from the state in matters of taxation:
• Churches were considered outside the jurisdiction of the king’s revenue system.
• This principle carried over into early American legal traditions, where religious institutions were assumed to be beyond taxation.
In this view, churches do not need an exemption because they were never rightfully taxable in the first place.
The Modern Implication: Is 501(c)(3) Unnecessary?
• If churches are inherently tax-free, then registering under 501(c)(3) might actually be a trap rather than a benefit.
• By applying for an official exemption, churches place themselves under IRS jurisdiction, which means they accept government restrictions in return for benefits.
• Some churches choose to reject 501(c)(3) status and operate under the argument that they were never subject to taxation in the first place.Supreme Court Cases and Legal Precedents
While the Supreme Court has upheld tax exemptions for churches, it has never explicitly ruled that churches must apply for them:
• Walz v. Tax Commission (1970): The Court upheld tax exemptions for churches but did not say they were necessary.
• McCulloch v. Maryland (1819): The famous ruling states that “the power to tax involves the power to destroy.” Applying this principle to churches means that any taxation would risk destroying religious independence.
This suggests that churches should not have to seek tax-exempt status—their immunity from taxation should be automatic.
- Conclusion: Churches as an Exception, Not an Exemption
• The First Amendment and common law tradition support the argument that churches should never have been taxable to begin with.
• 501(c)(3) status is not necessary—it is a government-created mechanism that makes churches voluntarily submit to regulations in exchange for a benefit they should already have.
• Some churches reject 501(c)(3) status altogether to remain fully independent.
Thus, the argument is not that churches “deserve” an exemption, but rather that they are not taxable in the first place.
