Michigan ranks #51 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. Michigan 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. Michigan, however, has several policies that are burdensome to faith-based nonprofits operating in the state, such as a broad Blaine Amendment, no RFRA, and laws regarding public accommodations and employment that include no meaningful exemptions for religious organizations.
Religious Freedom:
State Constitutional Protection of Free Exercise:
3
/5
The Michigan Constitution has been interpreted by the Michigan Supreme Court to provide stronger protections for religious free exercise or worship than the federal First Amendment. This score may be reduced if pending litigation overturns the current Michigan Supreme Court precedent.
State Religious Freedom Restoration Act:
-5
/5
Michigan 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:
-5
/5
Michigan’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:
-5
/5
Michigan’s nondiscrimination laws related to employment include no meaningful accommodations or exemptions to protect the autonomy of religious employers.
Protections for Religious Exercise in State of Emergency:
-3
/5
Michigan law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Blaine Amendment:
-5
/5
The Michigan 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 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:
-3
/5
Michigan’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
Michigan 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:
0
/5
Michigan generally requires charitable solicitation registration and only exempts entities that are not required to file Form 990, such as organizations classified as churches, religious orders, etc.
Audit Requirements Pursuant to Charitable Registration:
-3
/5
As a condition of maintaining authorization to fundraise in the state, Michigan requires the submission of reviewed or audited financials for organizations with annual contributions of $500,000 or more.
Corporate Income Tax:
5
/5
Michigan imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status.
Sales and Use Tax, Sales:
-3
/5
Michigan imposes a sales and use tax on religious organizations’ sales and only provides limited exemptions for certain items.
Sales and Use Tax, Purchases:
-3
/5
Michigan imposes a sales and use tax on religious organizations’ purchases and only provides limited exemptions for certain items.
Property Tax:
1
/5
Michigan imposes property tax and provides only fragmented property tax exemptions that include only a narrow subset of religious organizations.
