Today the City Council of Nome, Alaska will vote on the possible end to a sales tax exemption for houses of worship and nonprofits, according to Nonprofit Quarterly. If passed, Nome would be the first municipality in the US to do away with the exemption.
Facing a budget deficit, the Council spent an hour earlier this month debating possible revenue-generating strategies and decided that ending the church sales tax exemption was their preferred strategy. Because there is nothing the Constitution or in federal law that mandates a tax exemption for religious groups, the vote could easily do away with the niceties of sales tax exemptions.
Critics say that if the measure passes, however, the Nome action would not just affect churches and other religious organizations, but all 501(c) nonprofits in the city, who are often strapped for cash and need every penny for the programs and people they serve, according to Nonprofit Quarterly:
Among the groups that would lose their sales tax exemption would be a pre-school group, a community center, an emergency shelter, and a swim team, as well as Kawerak’s day care, Head Start, employment training, and other program offerings.
The city’s finance director, Julie Liew, estimates that the end of the sales tax exemption for churches and nonprofits would generate $300,000 in revenues for the city, whose population is just 3,797.