In the iconic Blues Brothers movie, Sister Mary recruits Jake and Elwood to help raise money for delinquent property taxes on the Catholic orphanage in which they grew up. The music is legendary, and the Sweet Home Chicago-area scenes are memorable – Maxwell Street, Lower Wacker, the Daley Center, and the destruction of the Dixie Square Mall. But wait: did they really need to pay those property taxes, or could they have avoided the Illinois Troopers and Jail House Rock all together? The best legal strategy surely would have made for a dull movie. Cruising around in a ’74 Dodge with cop tires and cop suspension beats paperwork after all! But there is a better answer under Illinois law for the rest of us, with no road shenanigans necessary.
Christmas is the season for gift-giving as Christians around the world celebrate Jesus’ birth. More broadly, all religions within the United States enjoy the gift of tax exemption. But just how far does tax exemption extend – and is it truly a gift, or a right? Does tax exemption extend only under Section 501(c)(3)? What other taxes also affect churches? Tax scholar and law professor Edward Zelinsky answers these questions in the newly published book Taxing the Church (Oxford University Press 2017), addressing the diversity of which houses of worship are taxed, the normative question of whether they should be taxed, and provides a fourfold framework for understanding church taxation.
In lawyer David Simon’s call to abolish property tax exemption for “rich” nonprofits, he argues stridently that Illinois property tax exemptions reflect another example of unfair privileges, this time for “wealthy” nonprofits like the University of Chicago and Northwestern University. He thus advocates for granting property tax exemptions only to nonprofits owning property valued at less than a million dollars. His bright-line rule seemingly eliminates the highly problematic political schemes such as those found in PILOTs (“Payments in Lieu of Taxation”) which some state and local governments have adopted. But his commentary ignores the long history of nonprofit tax exemptions, the extensive societal benefits (including both financial and intangible benefits) resulting from such exemptions, and other key policy considerations.