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Supreme Court's Health-Care Ruling Could Weaken Charity Tax Breaks
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Supreme Court's Health-Care Ruling Could Weaken Charity Tax Breaks

The U.S. Supreme Court's ruling upholding the Affordable Care Act—or "Obamacare," as some have dubbed it—has advocates of faith-based nonprofits concerned about potential unintended "collateral damage" to their bottom lines.

The worry: Chief Justice John Roberts's nod to lawmakers' wide discretion to impose taxes—and to condition taxes to influence behavior—could pose threats both to charities' tax exemptions and to donors' tax deductions.

"It's an issue that's definitely on our radar," said Rhett Butler, government liaison for the Association of Gospel Rescue Missions.

W. Scott Brown, vice president of the Christian Leadership Alliance, echoed Butler: "We are following this issue closely."

Stanley Carlson-Thies, president of the Institutional Religious Freedom Alliance, said he'd be surprised if the health-care decision doesn't spark "new activism" on the tax front.

"There's no reason to say the sky is falling before it's falling," he said. "But if it's getting darker, we ought to pay attention."

In a recent piece for The Chronicle of Philanthropy, nonprofit experts Suzanne Garment and Leslie Lenkowsky maintained that Roberts's majority opinion "makes it clear that if lawmakers voted to impose restrictions on tax-deductibility or tax exemption, they would not face any constitutional obstacles."

In the decision, Roberts wrote that "taxes that seek to influence conduct are nothing new."

Some advocates fear that the ruling could embolden efforts to limit exemptions to only nonprofits that serve the poor and minorities, or to only those that ...

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Supreme Court's Health-Care Ruling Could Weaken Charity Tax ...
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September 2012

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