Senator Says Task Force Not Interested in Taxing Churches

Yesterday we wrote about a proposal at the Arkansas Legislature to tax passive income of churches. The proposal was among those up for consideration at the legislature’s Tax Reform and Relief Legislative Task Force.

Under Arkansas law, income churches receive from things like interest earned on savings accounts or from the sale or rental of church property is not subject to the state income tax. The proposal before the task force would eliminate this exemption.

Sen. Jim Hendren (R — Gravette) is the senate chairman of the task force. I spoke with Sen. Hendren this morning, and he has assured me the task force has no interest in eliminating churches’ passive income tax exemption.

I am deeply grateful to everyone who contacted their state legislators yesterday to express their concern about this proposal, and I hope our elected officials will continue working to ensure taxes are not increased on churches and charities.

AR Lawmakers Looking at Proposal to Tax Churches

This morning the Arkansas Tax Reform and Relief Task Force met at the Capitol in Little Rock.

Among the items on the task force’s agenda is a proposal to tax investments, passive income, and sales by churches.

Under current law, Arkansas does not impose a state tax on interest churches earn investing money in savings accounts or on the sale or rental of church property.

This tax break has been on the books for more than 30 years, but now some lawmakers want to discuss doing away with it.

Charities and churches contribute at least $378 billion to the U.S. economy each year — and possibly much more than that, according to some estimates.

Many churches operate on budgets that are so tight they likely would have to shut their doors if they were taxed at the same rate as for-profit corporations. Our state needs to think twice before increasing the tax burden churches and charities carry.

This isn’t the first tax increase the task force has looked at this year. A few weeks ago the task force voted to move forward with discussions about increasing the state sales tax on groceries and ending Arkansas’ annual back-to-school tax holiday.

Family Council supported efforts to eliminate the grocery tax and worked very hard to help pass legislation creating the tax holiday in 2011.

If you are concerned about the Tax Reform Task Force’s proposal to raise taxes on churches, I encourage you to contact your state representative and state senator. If you need help contacting them, call our office at (501) 375-7000.