Out of 51 U.S. jurisdictions, Pennsylvania ranks #40 overall for its friendliness towards faith-based nonprofit organizations. Pennsylvania 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. Pennsylvania, however, has some policies that are burdensome to faith-based nonprofits operating in the state, such as laws regarding public accommodations that include no meaningful exemptions for religious organizations, sales tax with no meaningful exemptions on religious organizations’ sales, and an audit requirement to maintain charitable solicitation registration.
Religious Freedom:
State Constitutional Protection of Free Exercise:
0
/5
The Pennsylvania 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:
1
/5
Pennsylvania has enacted a RFRA that requires government burdens on religious exercise to satisfy a standard less than strict scrutiny.
Religious Freedom for Nonprofits with Public Programming:
-5
/5
Pennsylvania’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions.
Religious Freedom for Faith-Based Employers:
-3
/5
Pennsylvania’s nondiscrimination laws related to employment have only a narrow exemption allowing religious organizations to hire co-religionists.
Protections for Religious Exercise in State of Emergency:
-3
/5
Pennsylvania law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Blaine Amendment:
-3
/5
The Pennsylvania Constitution contains a Blaine Amendment that could prevent the participation of faith-based schools in generally available public benefit programs on the same terms as similarly situated secular schools. This is not as broad as a general Blaine Amendment, which prohibits all aid to faith-based institutions, but is still detrimental to the work of faith-based institutions. Current US Supreme Court precedent has rendered this language ineffective, but it could become effective in the future if Court precedent changes.
Regulatory Freedom:
Nonprofit Religious Corporation Act:
0
/5
Pennsylvania’s nonprofit corporation law mentions the option for nonprofit corporations to incorporate for religious purposes. However, the law lacks both: (a) specific provisions to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs and (b) an option to incorporate expressly as a nonprofit religious corporation.
Standards of Conduct for Directors of Religious Organizations:
3
/5
Pennsylvania 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.
Charitable Registration Law:
3
/5
Pennsylvania generally requires charitable solicitation registration but offers a narrow automatic exemption for certain religious organizations, such as churches.
Audit Requirements Pursuant to Charitable Registration:
-5
/5
As a condition of maintaining authorization to fundraise in the state, Pennsylvania requires the submission of reviewed or audited financials from organizations with annual contributions of $500,000 or less.
Corporate Income Tax:
5
/5
Pennsylvania imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status.
Sales and Use Tax, Sales:
-5
/5
Pennsylvania imposes a sales and use tax on religious organizations’ sales and provides no meaningful exemption.
Sales and Use Tax, Purchases:
3
/5
Pennsylvania imposes a sales and use tax but a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ purchases is generally available upon application.
Property Tax:
1
/5
Pennsylvania 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.
