Church stores: tax exemption concerns Print
Sunday, 14 September 2008 08:00 PM America/New_York

The recent denial of a property tax exemption for Texas Christian University's (TCU) bookstore has been closely watched by church-owned bookstores, who say they often walk a tightrope with taxing authorities.

In late April, TCU sued the Tarrant (County) Appraisal District over its denial of a property tax exemption for the university's two-level, 34,000-square-foot bookstore, which opened in January and is operated by Barnes & Noble.

In denying the property tax exemption, the district said the bookstore caters to the general public as much as it does TCU students, so it was not exclusively for educational purposes, the Fort Worth Star-Telegram reported.

George Thomsen, director of The Harvest Bookstore at Harvest Christian Fellowship in Riverside, Calif., told Christian Retailing that the TCU situation emphasized how there was no "boilerplate" answer to every tax situation facing church-affiliated retailers.

"Everyone has to deal with the Internal Revenue Service, and it does have some standards," he said. "But states, counties and cities are different."

Thomsen said churches that have bookstores have to be careful about outside promotions, which could be construed as using tax-exempt status to unfairly compete with merchants in the community.

Read the full report in the Sept. 22 issue of Christian Retailing magazine.