Inevitable question: Will nonprofits lose tax-exempt status over same-sex marriage?

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Sam Alito

Caricature by DonkeyHotey via Flickr Creative Commons

Samuel Anthony Alito, Jr., aka Sam Alito, is an Associate Justice of the Supreme Court of the United States. Caricature by DonkeyHotey via Flickr Creative Commons

The updated version of this post after Obergefell decision can be read here.

Guest post by Daniel Bennett

Could a religious university lose its tax-exempt status over the issue of gay marriage? It’s not as far-fetched as you might think.

In Tuesday’s oral arguments in Obergefell v. Hodges, Solicitor General Donald Verrilli—essentially, the federal government’s attorney—offered the Obama administration’s position on same-sex marriage. Not surprisingly, Verrilli argued that gay marriage bans are unconstitutional and should be struck down.

Sam Alito

Samuel Anthony Alito, Jr., aka Sam Alito, is an Associate Justice of the Supreme Court of the United States. Caricature by DonkeyHotey via Flickr Creative Commons

But in a subtle exchange with Justice Alito, Verrilli may have tipped his (and the Obama administration’s) hand on a topic of concern for many religious conservatives: whether a religious college could lose its tax-exempt status by opposing same-sex marriage.

Alito: In the Bob Jones case, the Court held that a college was not entitled to tax-exempt status if it opposed interracial marriage or interracial dating. So would the same apply to a university or college if it opposed same-sex marriage?

Verrilli: You know, I don’t think I can answer that question without knowing more specifics, but it’s certainly going to be an issue. I don’t deny that. I don’t deny that,

Alito. It is going to be an issue.

Bob Jones University v. United States saw the college lose its tax-exempt status after the IRS said Bob Jones’ prohibition on interracial relationships did not serve the public interest, a requirement of tax-exempt organizations. And if opposition to same-sex marriage is seen as not serving the public interest…well, you get the idea.

Some legal experts think this is a plausible scenario. In 2008 Jonathan Turley, writing in Same-sex Marriage and Religious Liberty: Emerging Conflicts, predicted this potential problem:

It is doubtful that a fundamentalist Muslim or Christian school would retain a teacher who openly marries a gay or lesbian partner. The resulting termination will trigger the same issues as were raised in Bob Jones. Indeed, the impact is likely to be more significant in the area of sexual orientation than it was in the Bob Jones case.

Of course, this is all hypothetical. The IRS has never hinted it will expand its rules for how tax-exempt status is granted beyond the Bob Jones threshold. Even if it did, Congress could pass a law correcting the rule. And if the issue ever reached the courts, a religious college could make the same kind of religious exemption claim endorsed in Burwell v. Hobby Lobby.

Still, such an outcome is possible – and if the Solicitor General is to be believed, inevitable. For now, Verrilli’s comments will only add fuel to the speculative fire.

Daniel Bennett, PhD, researches the conservative legal movement. He is an assistant professor of political science at Eastern Kentucky University. You can follow him on twitter at @BennettDaniel.

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  • JanusVI


    Will you deny legal marriage to twin brothers in love?

    (your name):___________________________

  • Jim Bob

    Will someone explain on what ‘basis’ you will tax a NFP organization?

  • Larry


    There are issues of the consensuality of such relationships which have nothing to do with children, religious notions or arbitrary traditions. Plus such relationships undermine family dynamics and play havoc with rights and obligations of spouses and next of kin.

    Any other irrelevancies you want to discuss having nothing to do with marriage equality?

  • Larry

    The IRS website can answer that question

    They are corporations/business entities which have income, have employees, and spend money. Why would the government not want its finger in such pies?

    Unless they can show compliance with narrowly construed Tax Exempt status rules, they are taxed like anything else which generates and moves money.

  • Garson Abuita

    Bob Jones dealt with educational institutions specifically, not non-profits in general. Also, the Court applied strict scrutiny because of its holding that racial equality in education was a fundamental interest for the government. This “strict scrutiny” standard really has only been applied to racial or national origin classifications. In the gay marriage cases, the standard is the much less burdensome “rational basis.” In sum, apart from the Court’s more recent First Amendment rulings on religious organizations, it would take a leap to apply Bob Jones to non-profits in general over sexual-orientation discrimination.

  • Greg

    This is a good article, and certainly makes a person think. I’m wondering if the liberal schools should indeed lose their tax exempt status for not abiding by the Second Amendment protections of “free exercise” of religion.

  • Larry

    “. I’m wondering if the liberal schools should indeed lose their tax exempt status for not abiding by the Second Amendment protections of “free exercise” of religion.”

    I am sure that made more sense in your head than on the page. 2nd Amendment being the right to bear arms as part of a well regulated militia. Either you made a mistake with amendments or making some kind of veiled threat about Christians using firearms and threats of violence to get their way.

    I am fairly positive you are trying to reference some kind of phony martyrbaiting distortion of a news event. Something where obnoxious fundamentalist Christians are trying to play victims because they ignored rules applying to everyone. You know because they claim God gives them special privilege over others. 🙂

    Am I getting close here.

  • Greg

    Larry, Yes, I made a silly mistake. Thanks for catching it. But the point is nevertheless valid. Religious people are a protected class.

  • Jon Altman

    Baptist churches in the South continued racially segregated worship seating policies for Decades after the 1964 Civil Rights Act was passed without losing their tax exemptions. It’s a red herring question to end all red herring questions.

  • Larry

    No, not really. The free exercise of religion is protected. Religious people are not. What constitutes the exercise of religion has always been subject to limitation and debate. Claiming to be religious does not grant privileges over others.

    In the majority of stories when an American fundamentalist christian is claiming persecution or discrimination, they are simply being told to desist obnoxious or harmful acts. Being told, “no, we don’t need to treat you special” is seen as persecution. Whinybabies.

  • Larry

    Churches don’t charge tuition to belong to them or provide certifications which are recognized to the outside world. Like a college degree.

  • Greg

    Larry, a little common sense is needed: those protected by our Constitution, are a protected class, especially when specifically called out.

  • Doc Anthony

    That’s simple, Jim Bob. It’s the same basis on which Obama’s IRS tried to attack Billy Graham after he publicly spoke out against legalizing gay marriage in North Carolina.

    If you speak out against gay marriage, or if you fail to kowtow to such a ceremony immediately if you are requested to do so, the Gay Gestapo comes after you. Period. That’s the basis.

    Churches, Non-Profits, it doesn’t matter anymore. Speak out against unprecedented national evil, and it’s going to be an Economic Kristallnacht for you. Your tax-exemptions — indeed your constitutional religious freedoms — will be revoked. Welcome to Gay Marriage.

  • Ben in oakland

    It’s only an inevitable question for those people who live in so much fear that any recognition of gay people means the end of their religious freedom.

    As an atheist, I stand 110% with my Christian bretheen in supporting their right to do whatever they wish within the real confines of their faith. BJU should never have lost their tax exempt status. Nor would I support any punishment directed at any actual religious institution for their stand on same sex marriage, nor forcing them to conduct same sex marriages, or anything like it.

    But that doesn’t mean they are not up for criticism.

    Nor does it mean that their religious freedom trumps my freedom to be free of their purely theological beliefs.

  • Larry

    Actually it was Franklin Graham and he was contributing and lobbying like a PAC. Religious tax exemption under such circumstances is an abuse of the privilege.

    Religious organizations aren’t entitled to tax exemption as a right. It is done as an extension of the 1st Amendment on the condition that religion is not entangled with government. The constitution does not protect you from the tax man.

  • Commenter

    Greg – this article is about tax exempt status, not your freedom of speech. Here’s the deal:

    1) If you attempt to influence legislation, such as formally declaring that gay marriage should be illegal, or having a designated spokesperson (like a priest) attempt to influence legislation, then you should be taxed LIKE EVERYONE ELSE. No one is saying you can’t voice your opinion.

    2) A public organization (like a school) cannot stop you from saying anything (like gay marriage should be illegal) – REGARDLESS of its tax exempt status. However, every organization, public or private, has the *responsibility* to prevent threatening or intimidating speech. For example, my religion says all infidels must be killed. Do you think I have the religious right to go around a public school and say everyone should be killed? The liberals have gone overboard in preventing the voicing of opinions – but that has nothing to do with tax exempt status.

  • Commenter

    You are missing the point – a religious organization cannot be forced to perform gay marriage ceremonies or even acknowledge them. However, if that organization attempts to influence legislation AND/OR treats an individual differently because they are in a gay marriage – the they absolutely must lose their tax-exempt status.

    If you do not treat all people equally in terms of services, you are no longer a charity or religious organization, you are, effectively, a country club – and you should be taxed.

    For example, the Catholic Church already only performs marriage ceremonies between a *confirmed* Catholic male and a *confirmed* Catholic female. Confirmed Catholics require a better option for a marriage ceremony than that which is provided by the state. This is a (reasonably) credible position, so they don’t lose their tax exempt status. However, any further bigotry against gays would be questionable – so IMO the Church better watch out.

  • Commenter

    “Baptist churches in the South continued racially segregated worship seating policies for Decades after the 1964 Civil Rights Act was passed without losing their tax exemptions.”

    Was this practice ever challenged in US federal courts and upheld? Your example is meaningless unless you can cite a legal decision supporting it. There are uncountable wrongs in society that continue due to lack of legal resources or interest. Most of these practices stop when someone complains because they realize they would lose if challenged.

  • Commenter

    The definition of protected class is a legal term independent of the Constitution. There is much debate whether homosexuals should be a protected class – it’s a big deal. It’s why you can still fire a gay person simply because you think she is gay in some states.

    However, being a protected class is irrelevant in terms of tax exempt status. In fact, it’s the opposite of what you are saying. Protected classes MUST be taxed the same. Jews, Catholics, Muslims, blacks, whites, Asians, men, women – *all* must be taxed the same.

    The issue is about ORGANIZATIONAL tax exempt status – not individual tax status.

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