Iowa ranks #8 overall out of the 51 U.S. jurisdictions for its friendliness towards faith-based nonprofit organizations, making it one of the best states in which to operate a faith-based nonprofit. Iowa has several policies that facilitate the contributions of faith-based nonprofits, including an automatic exemption from state corporate income tax for religious organizations that have 501(c)(3) status and strong nonprofit religious corporation laws. Additionally, Iowa has no charitable solicitation registration requirements. Iowa, however, has some laws that are burdensome to faith-based nonprofits operating in the state and lacks both protections for religious exercise during a state of emergency and a RFRA.
Religious Freedom:
State Constitutional Protection of Free Exercise:
0
/5
The Iowa Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment.
State Religious Freedom Restoration Act:
-5
/5
Iowa has not enacted a RFRA and has enacted nondiscrimination laws that conflict with the beliefs of many religious organizations.
Religious Freedom for Nonprofits with Public Programming:
3
/5
Iowa’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities but provide accommodations or exemptions for the vast majority of religious organizations.
Religious Freedom for Faith-Based Employers:
3
/5
Iowa’s nondiscrimination laws related to employment are broad but provide strong accommodations or exemptions to generally protect the autonomy of the vast majority of religious organizations.
Protections for Religious Exercise in State of Emergency:
-3
/5
Iowa law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Blaine Amendment:
3
/5
The Iowa Constitution does not contain a Blaine Amendment but also does not expressly protect faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions.
Regulatory Freedom:
Nonprofit Religious Corporation Act:
5
/5
Iowa’s nonprofit corporation law includes a designated law governing the formation and operations of nonprofit religious corporations and specific provisions to protect their right to self-government in internal affairs.
Standards of Conduct for Directors of Religious Organizations:
5
/5
Iowa law permits a director to rely on guidance from religious figures within his or her faith tradition in the fulfillment of the director’s fiduciary duties.
Charitable Registration Law:
5
/5
Iowa has no charitable solicitation registration requirements.
Audit Requirements Pursuant to Charitable Registration:
5
/5
Iowa has no charitable registration requirement, and therefore no audit requirement.
Corporate Income Tax:
5
/5
Iowa imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status.
Sales and Use Tax, Sales:
3
/5
Iowa imposes a sales and use tax on religious organizations’ sales but generally provides a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ sales upon application.
Sales and Use Tax, Purchases:
-3
/5
Iowa imposes a sales and use tax on religious organizations’ purchases and only provides limited exemptions for certain items.
Property Tax:
3
/5
Iowa imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes.
