Out of 51 U.S. jurisdictions, Minnesota ranks #18 overall for its friendliness towards faith-based nonprofit organizations. Minnesota has several laws 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. Minnesota, however, has some policies that are burdensome to faith-based nonprofits operating in the state, such as a broad Blaine Amendment and a lack of a RFRA.
The Minnesota Constitution has been interpreted by the Minnesota 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).
Minnesota’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.
Minnesota’s nondiscrimination laws related to employment provide strong accommodations or exemptions to generally protect the autonomy of most religious organizations.
The Minnesota 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.
Minnesota 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.
Minnesota permits a director to, in the fulfillment of the director’s fiduciary duties, 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.
Minnesota 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. There are no other meaningful exemptions to the registration requirement.
As a condition of maintaining authorization to fundraise in the state, Minnesota requires the submission of audited financials from organizations with annual total revenue of $750,000 or more.
Minnesota imposes a sales and use tax on religious organizations’ purchases but provides broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ purchases upon application.
Minnesota imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes.
