Church tax laws are not that complicated once we understand the different aspects governing these laws. A religious institution will have certain exemptions on taxes, and also certain restrictions in the way they conduct their financial affairs. Usually tax exemptions are given to charitable organisations, as such establishments provide some kind of public service and are beneficial to the community as a whole. There are various, tax exemption laws and churches automatically qualify for most of them. Being a religious institution, churches are also exempt from submitting statements of financial disclosure.
Under Church tax laws, a church is exempt from paying any property taxes. This rule is not well received by many people, as indirectly the people only end up bearing these taxes. Tax payers have to make good all the money which is not collected from the property of churches. This creates a kind of disparity, as many tax payers are forced to pay an amount indirectly for an organisation they may not even want to support. Also this Church tax law has been misused by many who want to avoid paying property tax. These people pose as ministers and give lessons on divinity through mail and claim exemption of property tax on their personal properties. In view of this, the State of New York has declared any mail-order religious organisation to be not exempted from property tax.
According to Church Tax laws, all donations made to a church do not attract any tax. This means a person who makes a donation to a church can deduct that amount from his total income and then calculate his taxes. This law is an incentive for people to donate to community groups and non-profit organisations in order that such institutions are directly supported by the public. Also according to church tax laws a church is allowed to undertake a commercial enterprise which is totally free from taxation.
Although the church is exempt from taxes, the ministers, pastors, music ministers and clergy have to pay taxes on their salaries and incomes. The church has to provide W-2 form for ordained pastors and ministers, and do not have to withhold any taxes and also are not required to pay any kind of medicare or social security. Non-ordained members are treated as any other employees and their taxes and social security has to be withheld by the church for paying to state and feral tax. The church has to maintain strict discipline in collection of donations and a minister is not allowed to make any payments from the collections.