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To: pigdog

See #40 and try doing as lewislynn suggests and try reading the bill yourself sometime.


44 posted on 10/10/2005 9:20:12 AM PDT by Your Nightmare
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To: Your Nightmare; lewislynn
Nightie and Looey ...

You're both full of beans (along with the requisite hot air) in your "churches taxing everything" disinformation.

Here's the actual interpretation from the FairTax website since you haven't been able to post applicable portions from the bill (hint - they ain't there to back up your claim):

"FairTax treatment of churches and non-profit organizations

(SEC. 706. NOT-FOR-PROFIT ORGANIZATIONS)

There is no definition of church in the FairTax legislation. Churches or houses of worship come under the definition of not- for-profit organizations.

In order to receive advantageous tax treatment, a church must be a “qualified not- forprofit organization” – an organization that is organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educationa l purposes; as a civic league or social welfare organization; as a labor, agricultural, or horticultural organization; as a chamber of commerce, business league, or trade association; or as a fraternal beneficiary society, order, or association. And no part of the net earnings of said not- for-profit organization shall serve to the benefit of any private shareholder or individual.

Religious organizations that meet the above criteria are issued a “qualification certificate” upon application to the state sales tax administering authority (on a form prescribed by the U.S. Secretary of the Treasury).

The FairTax does not treat tithes, dues, contributions, and similar payments to religious organizations or qualified not- for-profit organizations as payments for taxable property or services subject to tax. Individuals make such payments or contributions to religious or other not- for-profit organizations tax free.

If churches or non-profits provide taxable services at no charge (they run a soup kitchen for the poor, for example), these services are not subject to tax.

Taxable property and services purchased by a qualified not-for-profit organization “for business purposes” are not taxable. The organization must present its qualification certificate to the seller when making a purchase in order for the sale to be tax exempt. If a religious organization or qualified not-for-profit provides taxable property or services in connection with contributions, dues or other payments to the organization, then it is required to treat the provision of the taxable property or services as a taxable purchase at the fair market value of the taxable property or services.

In other words, purchases for business purposes are tax exempt and sales to consumers are taxable, e.g., a church selling Bibles. The church pays no tax when it purchases the Bibles but it must collect sales tax when it sells the Bibles. The church is likewise responsible for remitting the tax to the state sales tax authority.

As the FairTax exempts savings and investment, there is no tax on interest earnings on endowments – assets, funds, or property donated to a not- for-profit organization as a source of income.

Since the FairTax repeals all income/payroll taxes, there are no other federal reporting requirements for not-for-profit organizations. It also repeals the prohibitions on political activity by churches and not- for-profit organizations, as detailed on page 2 of this document."

The "page 2" definitions referred to are the regs under which the tax exempt status may presently be jerked by the IRS - and make interesting reading but are not pertinent here since they don't apply under the FairTax.
48 posted on 10/10/2005 9:41:42 AM PDT by pigdog
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