‘I am a Christian but I am not a member’: The ‘Lutheran Church’ is growing in Utah
Utah lawmakers passed a bill Wednesday that would make it easier for churches to use tax-exempt 501(c)(4) status to take advantage of a federal program that allows them to avoid tax on their expenses and help with social welfare.
The measure passed the House unanimously and was sent to the Senate for consideration.
The legislation, titled the “Luthera,” was signed into law by Gov.
Gary Herbert on Wednesday afternoon and signed by Herbert’s chief of staff, Joe Turek.
It was the second such law signed by the governor.
The bill allows for churches that use the nonprofit status to deduct $1,000 per church member for the costs of “educational expenses, equipment, supplies, and training.”
It does not require churches to pay taxes on the expenses, but it would allow churches to deduct their expenses for certain “educative purposes.”
“The bill does not allow for churches or religious organizations to deduct the cost of religious education or social welfare,” Tureki said.
“If a church is using 501(C) status, we can only deduct the amount of tax that the church is taking on.
That does not cover all the expenses.
For example, a church may be taking on $1.5 million in costs related to religious education.”
Utah’s church-tax exemption was established in 1998, when then-Gov.
Bob Bennett created the program to allow churches in the state to claim the deduction on their federal tax returns.
A similar program allows churches to claim their charitable deductions on their state taxes.
The federal program provides tax-free benefits to churches that are not affiliated with a specific denomination.
“Utah’s churches are among the most diverse and vibrant churches in America, and we’re proud of our history of serving the poor, working people, and the poor in general,” Herbert said in a statement.
“This bill provides additional support for the Utah economy, the economy of the state, and all Americans who want a better life for themselves and their families.”
The bill also includes provisions that would require churches that operate for profit to disclose to the state their financial condition and to file an annual report with the state auditor on any financial and operational expenses.
The bill also prohibits churches from using the 501(a) status for political purposes.
The church-in-law tax deduction has been a divisive issue in Utah, which has a long-standing history of anti-church legislation.
In 2012, then-Governor Gary Herbert signed a bill into law that made it illegal for churches in Utah to deduct expenses related to their mission.
In 2016, the House passed a similar measure to the same effect, but was vetoed by then-President Donald Trump.