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How Church-Run Coffee Shops, Bookstores, and Other Ventures Can Trigger Tax Liability

Seven articles to help you understand unrelated business income.

The Editors

What is unrelated business income tax, or UBIT for short? Should your church be concerned? It depends, and that’s why knowing the rules will help the leaders at your church make wise decisions.

“A church is permitted to conduct an insubstantial amount of unrelated business activity,” explains CPA Michael E. Batts. “However, if a church engages in a substantial amount of unrelated business activity, the church could lose its tax-exempt status under Section 501(c)(3) of the Internal Revenue Code,” he notes.

For several years, ChurchLawAndTax.com has followed both court decisions regarding UBIT, addressed subscriber questions, and offered expert guidance about what to consider when ministry becomes business. Learn more about UBIT with the articles listed below.

Q&A: Should We Allow Private Music Lessons on Church Property?

What to consider and why before saying “yes.”

Frank Sommerville

How the IRS Determines If a Church Must Pay UBIT

A look at why the unrelated business income tax exists, plus a case review that shows how the resulting tax code was applied to one church.

Richard R. Hammar

Q&A: Are Advertisements in an Anniversary Program Booklet Taxable Income?

Selling advertisements in your church’s anniversary program book is perfectly legal, but there are two issues you need to consider.

Richard R. Hammar

Q&A: Are Items Sold in Our Church’s Welcome Center Considered Unrelated Business Income?

What to know before stocking up on T-shirts and coffee mugs with your church logo.

Frank Sommerville

Q&A: Can a For-Profit Food Truck Make Money on Church Property?

Receiving more than $1,000 from a vendor could be considered unrelated business income.

David Fletcher

Does Your Church Owe Taxes on Alternative Revenue?

Answers about the often misunderstood world of unrelated business income, also known as alternative revenue.

Michael E. Batts

When Ministry Becomes Business

How to know when a new bookstore or childcare center will attract IRS attention.

John R. Throop

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