May 26, 2006

Officials in the Texas Office of the Comptroller have agreed to extend tax-exempt status to a non-theistic church.

In a May 18 letter to Americans United for Separation of Church and State, the Comptroller’s Office confirmed that it has granted tax-exempt status to the Church of Freethought, a Dallas-area congregation.

“This is a victory for religious freedom,” said the Rev. Barry W. Lynn, Americans United executive director. “Government must never play favorites when it comes to religion.”

Americans United intervened on behalf of the Church of Freethought after the Texas agency refused to grant it tax exemption.

The Church of Freethought (COF) is considered tax exempt under federal guidelines published by the Internal Revenue Service, but Texas officials had refused to follow suit. The Office of the Comptroller insisted that the church “appears to be a discussion or social group rather than a religious organization.”

Church members countered that they offer services similar to other congregations. Notes the church’s Web site, “The COF is and does everything that any other church does but without supernaturalism and without imposing doctrines and dogmas on its members.”

In December, Americans United formally requested that the Church of Freethought be recognized as a tax-exempt body under Texas law. AU attorneys cited a state appeals court ruling granting tax-exempt status to the Ethical Culture Fellowship of Austin.

In the Ethical Culture case, the Comptroller’s Office had insisted that the group does not qualify as a religion unless it recognizes a Supreme Being. In a press statement, state Comptroller Carole Keeton Strayhorn insisted that giving tax-exempt status to non-theistic groups would prod “any wannabe cult who dresses up and parades down Sixth Street on Halloween” to apply.

But the Comptroller’s Office has now recognized that its position was not in compliance with the law.

In the recent letter to Americans United, Bryant K. Lomax, manager of the Tax Policy Division, wrote, “We have thoroughly reviewed your application in light of the Court’s opinion, and though we disagree with the Court’s interpretation in material respects, we believe that we are compelled under the Court’s opinion to grant the application.”

AU’s Lynn said he is pleased that the matter has been resolved without litigation.

“Given past rulings, we obviously would have won this case had it gone to court,” Lynn said. “I’m glad we didn’t have to take that step. Texas officials seem to understand there is no point in spending taxpayer money on a quixotic quest to make all religious groups conform to popular assumptions about what is and isn’t a religion.”

Americans United is a religious liberty watchdog group based in Washington, D.C. Founded in 1947, the organization educates Americans about the importance of church-state separation in safeguarding religious freedom.