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Church sales tax exemption effective July 1

June 23, 2012


Beginning in July, churches in Mississippi will be eligible for a sales tax exemption on utilities such as water, electricity and fuel.

Mississippi House Bill 582, which will go into effect July 1, applies to sales of natural gas, electricity sales, current, power, liquefied petroleum gas or other fuel for lighting, heating and sales of potable water “utilized on property that is primarily used for religious or educational purposes.”

In order to qualify, churches are required to provide a copy of their Internal Revenue Services determination letter affirming the church named on the letter is exempt from income taxes. Utilities must be sold to, billed to and paid for directly by the church.

Miss. 37th District House Rep. Gary Chism, who helped write the bill, said the legislation easily passed through both the state House and Senate.

“It took off by itself that we ought to give that break to churches,” Chism said. “Let’s say (a church’s utility budget is) $50,000. Seven percent would be $3,500, so that would be a $300-a-month savings that could be used to help the church do other things.”

Vicki Schramm, church administrator at First Presbyterian Church of Starkville, said that’s exactly what the church will do with the extra money it will have as a result of the bill.

“It’s a savings to our operating budget and we can channel it back to our ministry, which we will do,” Schramm said. “We have applied for it and we’re excited.”

The exemption applies only to churches and not other commercial businesses operated by a church.

Chism said applicants associated with churches having 501(c)(3) non-profit status only need to fill out a form with the Mississippi Department of Revenue once, and officials with churches not having that status will have to apply once a year.

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