Wednesday, June 27, 2018
Adam Chodorow (Arizona State), The Parsonage Exemption, 51 UC Davis L. Rev. 849 (2018):
The parsonage exemption allows “ministers of the gospel” to exclude the value of housing benefits from income, whether received in-kind or as a cash allowance. Critics argue that the provision violates the First Amendment’s Establishment Clause, while supporters contend that it does not single religion out for a cognizable benefit. Alternately, supporters claim that it is a permissible accommodation for religion under the First Amendment’s Free Exercise Clause. This Article fills an important gap in the debate by offering a nuanced explanation of how the parsonage exemption and other housing provisions function within the tax code.
Placing the exemption in its proper context makes clear that the parsonage exemption: (1) operates as a unique subsidy for religious actors; (2) involves significantly more church-state entanglement than would its elimination; (3) violates core tax principles of horizontal and vertical equity; and (4) differs significantly from other exemptions for religious actors.