Tax Exempt Status
Every Unitarian Universalist Association (UUA) congregation is a “church” under U.S. tax law, therefore tax exempt, charitable, and exempt from tax filing.
There is no “group exemption” from the UUA, but the UUA will provide a letter saying a congregation is in good standing. This addresses most tax exemption issues. For a letter of good standing from the UUA, contact the UUA Office of the President Executive Assistant: administration [at] uua [dot] org.
Many congregations seek their 501(c)(3) status for its benefits:
- Donors don't need additional proof of their tax-deductible donation to your congregation if they are audited.
- You can apply for certain grants.
- You can take advantage of special rates for non-profits.
- You can sponsor an R-1 visa (Nonimmigrant Religious Worker) that allows you to hire a non-citizen.
Sales Tax Exemption
More than 30 states offer sales tax exemption. If your church were to gain sales tax-exempt status, the only requirement to receive the benefit is proof of exemption at any retailer at the time of purchase. However, any exempt purchases made by your church must be used exclusively for the purpose of the church.
In general, when applying for sales tax exemption your state will require the following items:
Articles of incorporation: This document will help serve as proof that the church has incorporated with the state.
F.E.I.N: The Federal Employment Identification Number is required. Make sure the F.E.I.N of the church matches the name that appears on your articles of incorporation.
IRS determination letter: This is the IRS' “approval letter” for your 501(c)(3) status. Many states require 501(c)(3) status with the IRS before applying for sales tax exemption.
Political Issues, Elections, and Lobbying
Can congregations lose their tax exempt status when speaking out on political issues, elections, and lobbying?
The UUA, in collaboration with our legal counsel, has prepared a guide laying out the boundaries for political speech and action.
The Real Rules is composed largely of direct quotes from the most recent and relevant IRS publications, organized in a way that is intended to be user-friendly. All references are clearly documented with footnotes.
Other information on Congregations’ Tax status can be found in IRS Pub. 1828: Tax Guide for Churches and Religious Organizations (PDF, 32 pages).