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

How Church-Run Coffee Shops, Bookstores, and Other Ventures Can Trigger Tax Liability
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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, who shared his insights on the topic during the free webinar, The 5 Most Misunderstood Aspects of Unrelated Business Income for Churches. “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.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold 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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Posted:
  • February 17, 2020

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