Registration Fee for Religious Groups Permissible

Fees to reimburse a city for certain services acceptable.

Church Law and Tax 1993-05-01 Recent Developments


Key point: Church schools and child care facilities may be subject to a registration fee in some states. Such a fee, if imposed to reimburse the government for the reasonable cost of conducting an annual inspection will not be a “tax” and will not violate the constitutional guaranty of religious freedom.

A New Jersey appeals court ruled that an annual registration fee of $115 assessed against a church-operated school and child care center was constitutionally permissible. New Jersey law imposes an annual registration fee on several categories of public buildings, including schools and child care centers. The purpose of the fee is to help pay the cost of an annual inspection to determine compliance with state fire and safety regulations. A church that operated both a school and child care program opposed the fee on the ground that it amounted to a tax on churches that violated the first amendment guaranty of religious freedom. A state appeals court rejected the church’s claim. The court observed:

“If the primary purpose of a fee is to raise revenue, it is a tax …. [I]n contrast to a tax, a fee is imposed under the government’s police power to regulate [to promote the public health, safety, and welfare]. A fee is not judged a tax so long as the amount of the fee bears a reasonable relationship to the cost incurred by the government to regulate. If a fee’s primary purpose is to reimburse the municipality for services reasonably related to development, it is a permissible regulatory exaction.”

The court concluded that the registration fee in this case was a fee rather than a tax, since its purpose was to recover the cost of conducting the annual safety inspection of the church’s school and child care center. The court rejected the church’s claim that its constitutional right to freely exercise its religion was violated by the fee. It noted that the church had failed “to demonstrate any change of behavior or violation of its beliefs which have resulted from the imposition of the fee.” The court also relied upon a 1990 decision of the United States Supreme Court holding that religious beliefs do not relieve a person or organization of the duty to comply with religiously-neutral laws of general applicability. Employment Division v. Smith, 494 U.S. 872 (1990). Since the New Jersey law in this case was religiously neutral and of general applicability (it applied to all schools and child care centers, whether operated by a church or not), it was constitutionally valid even though it infringed upon the alleged religious beliefs of the church. The court also noted that the law specifically exempted churches from the fee. New Life Gospel Church v. Department of Community Affairs, 608 A.2d 397 (N.J. App. 1992).

See Also: State Taxes

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