“Is this legal?”

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by Prince Of Petworth March 2, 2016 at 3:00 pm 41 Comments

church_cell

“Dear PoPville,

Can a church legally earn revenue by having cell phone towers on its roof? I thought churches were exempt from taxes so that’s why they rely on donations. This is Lincoln Park Methodist.”

Kingman Park

Churches are exempt from SOME taxes not all (i.e. payroll taxes). They might pay taxes on the revenue from that. Perhaps some research is in order.
- Caleb
  
  They can make money just like any other business. Universities and colleges are mostly all non-profits…I’m sure most readers of this blog paid far more than a donation to their alma maters.
textdoc

Not a lawyer, but… as far as I know, being tax-exempt does not necessarily mean being not-for-profit.
- Timebomb
  
  I think it might, but not-for-profit does not mean no-revenue.
  - nc
    
    THIS.
    - MMMkay
      
      Exactly. People seem to think that tax-exempt/nonprofit mean that they can’t make any money. It just means that they can operate like a normal business, except that their profits must be reinvested in the company.
      - textdoc
        
        I didn’t know there was a requirement for their profits to be “reinvested.” I guess that explains luxurious buildings, fancy cars, etc.
      - anonymous
        
        This is also why GWU owns half of NW DC.
    - Caleb
      
      Amen on the GW comment.
      .
      But they purchased that land when Foggy Bottom was the super sketch and no one wanted to go to the then mediocre school. Then when property values started going up, along with their tuition and ranking, they sold and leased much of that land for hefty dollar amounts.
- GBinCH
  
  Actually, churches are meant to be not-for-profit, but there’s nothing wrong with churches raising revenue so long as they spend it (which does include salaries for pastors, etc.).
- wdc
  
  The church is probably not turning a profit at the end of the year, cell towers notwithstanding. You could check out their 990, assuming their annual receipts are over $25,000.
  Non profits earn money all kinds of ways. Think how much money the girl scouts are raking in on cookie sales.
  - DCer15
    
    Churches are not required to file 990s (the Form 990 is a tax return for exempt organizaitons).
Philippe Lecheval

Oh, churches do all sorts of ethically-questionable things that you’d think would be illegal.
eva

What? Why wouldn’t it be. Non profits are allowed to be revenue positive. They have to spend those revenues on their mission, not to enrich their leadership/shareholders. That’s really the only difference legally speaking. Many/most nonprofits engage in revenue generation through fee for service activities.
Art D.

Yes. It has been a common practice around the country for at least ten years.
- spookiness
  
  It is very common, and in many areas churches are prime locations because the steeples are the tallest thing around.
DC Rez

It is legal. The cell phone carrier made a presentation to ANC 6a some time last year about the plans (that’s the church at 13th and North Carolina, NE).
CHGal

NFP Accountant here. Most non-profits are required to pay taxes on “unrelated businesses”. My professional association does not pay taxes on donations received, or dues from members, but we do pay income tax on revenue from advertising sales in our journals, even though this revenue is used to support our mission. This church “should” be paying on this revenue, although it may be too small.
- GBinCH
  
  Fascinating. I had no idea that’s how it worked.
- eva
  
  But a professional association would be a (c)6 right, not a (c)3? I believe the requirement that you pay taxes on that revenue is a unique requirement for a (c)6, which a (c)3 would not be required to fulfill. Or every (c)3 I’ve worked for has been seriously delinquent.
  
  #notanaccountant.
  - Atty
    
    Nope, c3s are subject to UBIT. Income derived from activities unrelated to the core mission of the c3 is taxable as UBTI. Many NFPs have gotten in trouble over this.
    
    http://www.nonprofitlawblog.com/unrelated-business-taxable-income-what-doesnt-count/
- TinkerTaylor
  
  Right. It’s often referred to as UBIT (unrelated business income tax).
- jumpingjack
  
  As a 501(c)(3) it should pay tax on UBTI, but a cell phone tower could fall into the rental exception, meaning income from it would not be taxable.
AnonAnon

It’s completely legal. Even though it is nonprofit it does not have to rely on donations exclusively to generate revenue. As long as the right permits were obtained a church may have a cell phone tower on it’s roof to generate revenue.
Also churches are not-for-profit. But not-for-profit is a bit more complex than people realize. Not-for-profits can engage in all sorts of business activities outside of just receiving donations. As long as this keeps the church running and is not used in an illicit manner(fraud), this activity is allowed to supplement donations and other forms of church revenue for operations and programs.
MK32

There’s a few good answers above already, but churches are just registered as 501(c)(3) orgs–just like half of the groups in DC. Non-profits can raise as much revenue as they want, but they just don’t pay out the difference on anything left unspent (“profit”) to shareholders. This is the equivalent of revenue from renting out use of a meeting hall to another group. In this case, they’re renting out use of their roof to a wireless company. Given the occasional spotty cell service in certain areas of this city, I welcome more towers.
- Anonymouse
  
  Just a bit of clarification … every state and DC has specific laws specifically exempting religious institutions from certain taxes such as property taxes. Even if the religious institution is not registered as a 501(c)(3).
NIMBY Whiner

Apparently it’s legal to park across cross walks, at bus stations, on sidewalks, beside other legal parked cars in the middle of the road, backwards, sideways, etc. Pretty much anything you want to do with your car on Sundays in the name of the Lord is legal. Don’t believe? Try call 311 then being directed to 911 after you and your kid almost get run down on a cross walk and being completely ignored.
Eh what does it matter, I’m just an annoying gentrifying parent anyway?
Anonymous

Don’t tell the United House of Prayer! They are a land development company that also just happens to do the Lord’s Work. And that pastor has a sweet, sweet ride.
o2bncdg

I wonder what the “revenue” is for some high (elevation wise) churches, like the National Cathedral. I think there are tons of antennae up there. I guess it’s all legal, as Episcopalians would NEVER try cheatin’ the government out of funds.
Charles

Some church cell towers are built into steeples or giant crosses. The cell companies have been approaching churches to use their properties for years:
http://articles.latimes.com/2012/dec/25/local/la-me-church-cells-20121225
h st

Check out this John Oliver piece on televangelists. It really applies to any religious organization, even if they don’t go on TV. There are basically no rules. Not say all religious groups are bad, just that there are no real legal rules.

https://www.youtube.com/watch?v=7y1xJAVZxXg
SWChris

Every former kindergarten tattletale that now resides in the DMV posts here
squish

Are they cell phone towers? Some churches in the area run radio stations (and one in Silver Spring has its own TV network). Could those actually be transmission towers for something “good”?
andy2

The things people ask about and immediately assume are illegal never ceases to amaze me.
- textdoc
  
  The fact that the OP is asking “Is this legal?” makes it sound to me as though he/she is not assuming it’s illegal — just wondering and seeking information.
  .
  What’s legal in D.C. and what’s not isn’t necessarily intuitive, which is why we see so many PoPville posts wondering if a given thing is legal/allowed.
- ES
  
  +1000000
ah

Be glad the church is willing to do this so you can have better cell service.

The alternative is a tower near you, or your school, or somewhere you probably don’t want it to be.

On the church it can irradiate people for a couple of hours on Sunday instead of 24/7, except maybe the priests et al. who may suffer from more exposure. But they’ve got ways to avoid those problems.
Angry Parakeet

I worked on that project; it was a tough one because of the location. Churches LOVE to host cell sites because it’s free money. No they do not pay taxes on it. Do you know how many tithing members it would take to get this much money? I have forgotten the exact lease amount AT&T and T-Mobile each pay but it’s over $1,500 from each of them a month.
Many churches have antennas within their steeples or have had their steeples replaced with plastic ones containing the antennas.
- saf
  
  Yes, we do pay taxes on that kind of income.
- brown mun
  
  Mind me asking what you mean by “worked on that project”?
Dogg

With god, all things are possible

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