Vermont ranks #42 overall out of the 51 U.S. jurisdictions for its friendliness towards faith-based nonprofit organizations. Vermont 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 and no statewide charitable registration or audit requirements to solicit donations in the state. Vermont, however, has several policies that are burdensome to faith-based nonprofits operating in the state, such as no RFRA and laws regarding public accommodations and employment that include only narrow exemptions for religious organizations.
Religious Freedom:
State Constitutional Protection of Free Exercise:
0
/5
The Vermont 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
Vermont 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
Vermont’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide only narrow accommodations or exemptions related to the celebration or solemnization of a marriage.
Religious Freedom for Faith-Based Employers:
-3
/5
Vermont’s nondiscrimination laws related to employment have only narrow exemptions.
Protections for Religious Exercise in State of Emergency:
-3
/5
Vermont law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Blaine Amendment:
3
/5
The Vermont 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:
0
/5
Vermont’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
Vermont 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:
5
/5
Vermont has no charitable solicitation registration requirements. Some local governments may have registration requirements.
Audit Requirements Pursuant to Charitable Registration:
5
/5
Vermont has no charitable registration requirement, and therefore no audit requirement.
Corporate Income Tax:
5
/5
Vermont imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status.
Sales and Use Tax, Sales:
-3
/5
Vermont imposes a sales and use tax on religious organizations’ sales and only provides limited exemptions for certain organizations.
Sales and Use Tax, Purchases:
3
/5
Vermont 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.
Property Tax:
1
/5
Vermont imposes property tax and provides only fragmented property tax exemptions that apply only to a narrow category of religious and/or charitable property uses, such as churches, schools, hospitals, and related outbuildings.
