Churches No Longer Tax Exempt in Puerto Rico?

Puerto Rico Secretary of the Treasury Juan Gómez Zaragoza announced that the territory’s government will be cracking down on churches that abuse their tax-exempt status.

Gómez Zaragoza told Puerto Rican newspaper Primera Hora that some churches in Puerto Rico operate on a for-profit basis, and therefore should pay taxes. In many cases, this would mean years of back payments, which would add up to sums worth pursuing.

Think Progress quoted Gómez Zaragoza as saying , “We hit the jackpot because we have realized that many of these organizations are family businesses [and] others have never requested tax exemption. We have realized that the potential (for collection) is very high.”

This kind of crackdown is unusual in the United States, given our emphasis on religious freedom, but Puerto Rico’s government is in a desperate situation with more than $70 billion in debt that it cannot pay.

“The problem,” says Gómez Zaragoza, “is that there are churches that are family businesses where people are making a profit. You can have a church for profit, like any other, just like a shoe store.”

The specific for-profit actions being investigated have not been described, but Gómez Zaragoza reported that several hundred dollars’ worth of back taxes have already been collected.

Religious organizations in Puerto Rico are objecting to the program, according to the organization Atheists of Puerto Rico. Ricardo Lopez Ortiz, Bishop of the Church of God Mission Board, has asked for a public apology to Puerto Rican churches. Gómez Zaragoza dismissed these concerns, saying that they were a natural defensive reaction.

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