Virginia ranks #43 overall out of the 51 U.S. jurisdictions for its friendliness towards faith-based nonprofit organizations, making it one of the worst states in which to operate a faith-based nonprofit. Virginia 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 a RFRA statute. Virginia, however, has several policies that are burdensome to faith-based nonprofits operating in the state, such as a broad Blaine Amendment, sales tax with only narrow exemptions on religious organizations’ sales, and laws regarding public accommodations that include no meaningful exemptions for religious organizations.
Religious Freedom:
State Constitutional Protection of Free Exercise:
0
/5
The Virginia 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:
3
/5
Virginia has enacted a RFRA that protects the religious free exercise of all individuals and entities by requiring government burdens on religious exercise to satisfy strict scrutiny. Since these protections originate in a statute rather than the state constitution, Virginia does not receive the highest score for this factor.
Religious Freedom for Nonprofits with Public Programming:
-5
/5
Virginia’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
Virginia’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
Virginia law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Blaine Amendment:
-5
/5
The Virginia 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, but it could become effective in the future if Court precedent changes.
Regulatory Freedom:
Nonprofit Religious Corporation Act:
-3
/5
Virginia’s nonprofit corporation law lacks: (a) specific provisions permitting the formation of nonprofit religious corporations; (b) specific protections for religious exercise at faith-based organizations, and (c) express acknowledgement of an option for nonprofits to incorporate for religious purposes.
Standards of Conduct for Directors of Religious Organizations:
3
/5
Virginia 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
Virginia generally requires charitable solicitation registration but offers a narrow automatic exemption for certain religious organizations, such as churches, and generally offers other narrow fragmentary exemptions upon application.
Audit Requirements Pursuant to Charitable Registration:
-3
/5
As a condition of maintaining authorization to fundraise in the state, Virginia generally requires the submission of: (a) reviewed financials for organizations with revenue of $750,000 or more but less than $1,000,000, and (b) audited financials from organizations with annual contributions of $1,000,000 or more.
Corporate Income Tax:
5
/5
Virginia imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status.
Sales and Use Tax, Sales:
-3
/5
Virginia imposes a sales and use tax on religious organizations’ sales and only provides limited exemptions for certain items, such as occasional sales of food items.
Sales and Use Tax, Purchases:
3
/5
Virginia imposes a sales and use tax on religious organizations’ purchases and provides an automatic, comprehensive, narrow entity-based exemption, with supplementary entity-based exemptions generally available upon application.
Property Tax:
3
/5
Virginia imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes.
