Indiana Government Survey: 1 in 4 Say Churches Should Make Payments

A 2010 survey of local government leaders in Indiana shows one in four want churches to make "payments" or provide services in exchange for receiving tax exemptions on their properties.

The survey results, released for the first time on Monday, incorporated responses from 1,150 local government officials, including mayors, county auditors, and county commissioners. "The results of our survey send a sobering message to charities that are already seeing their tax status challenged in several states," said Kristen Grønbjerg, the study's director, in a press release.

The Indiana Nonprofits: Scope and Community Dimensions project specifically focused on PILOTS—"payments in lieu of taxes"—and SILOTs—"services in lieu of taxes." Some municipalities use PILOTs and SILOTs to generate additional revenue from tax-exempt entities. Many towns, cities, and counties continue to see their coffers languish as tax appraisals for commercial and residential properties remain below once-peak levels and as sales tax collections remain volatile, dependent on the employment, pay raises, and confidence of consumers.

The Indiana Nonprofits study revealed 30 percent of government officials "believed that churches should provide payments or services in lieu of taxes, including 25 percent who favor PILOTs for these groups," according to the release.

"Taxing churches and religious property, however, is highly controversial and not a likely option for local elected officials," the release said.

When asked about compensation from government-owned property, 52 percent said PILOTs and SILOTs should be used.

ManagingYourChurch.com has previously covered the topic of payments and fees for churches, including a Bill Maher segment on the subject, and a property tax assessment dispute involving a small New Hampshire church.

Additionally, Christianity Today's Church Law & Tax Group, which publishes ManagingYourChurch.com, recently partnered with Brotherhood Mutual Insurance Company on a survey gauging the local, national, and international outreach and ministry services provided by nearly 1,500 churches nationwide. Among the notable findings in the Outlook for Outreach survey:

  • 96 percent provide local outreach, particularly with clothing and feeding the poor;
  • Along with providing disaster relief, more than half of the churches send teams on in-country mission trips (54 percent) and are engaged in housing construction projects;
  • Nine in ten churches allow other organizations to use their facility for outreach programs, so churches are opening their doors for others to serve too.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations."

Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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