Massachusetts ranks #49 overall out of the 51 U.S. jurisdictions for its friendliness towards faith-based nonprofit organizations, making it one of the worst places to operate a faith-based nonprofit in the United States. Massachusetts has some 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 as well as stronger state constitutional protection of religious free exercise than what is provided by the First Amendment. Massachusetts, however, has several laws that are burdensome to faith-based nonprofits operating in the state, such as state sales tax with limited exemptions on religious organizations’ sales, a burdensome audit requirement to maintain charitable solicitation registration, and a lack of a RFRA.
The Massachusetts Constitution has been interpreted by the Massachusetts Supreme Court to provide stronger protections for religious free exercise or worship than the federal First Amendment (as currently interpreted by the US Supreme Court).
Massachusetts’ nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities, but Massachusetts caselaw limits the application of these laws to religious organizations in certain situations.
Massachusetts’ nondiscrimination laws related to employment have only narrow accommodations or exemptions for only a subset of religious organizations.
The Massachusetts Constitution contains a Blaine Amendment that broadly restricts faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Current U.S. Supreme Court precedent has rendered this language ineffective in many cases, but it could become effective in the future if Court precedent changes.
Massachusetts nonprofit corporation law does not have any law deferring to religious beliefs and structures in governance matters and does not have any special provisions specific to the internal governance or operations of religious organizations.
Massachusetts law permits a director, in the fulfillment of the director’s fiduciary duties, to rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter but does not expressly allow a director to rely on guidance from religious figures within his or her faith tradition.
Massachusetts charitable solicitation law contains exemptions only for entities that are not required to file Form 990, such as organizations classified as churches, religious orders, etc.
As a condition of maintaining authorization to fundraise in the state, Massachusetts requires the submission of reviewed or audited financials for organizations with annual gross support and revenue of more than $200,000.
Massachusetts imposes a sales and use tax on religious organizations’ purchases but generally provides a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ purchases upon application.
Massachusetts imposes property tax and provides only fragmented property tax exemptions that include only a narrow subset of religious organizations or that apply only to a narrow category of religious and/or charitable property uses.
