Like all colleges and universities, seminaries are sizeable organizations with substantial budgets. How those budgets are treated in the eyes of the Internal Revenue Service often depends on the organization structure of a seminary.
501(c)3 Schools Are Usually Tax-Exempt
Colleges and universities are usually tax-exempt if they’re structured as a 501(c)3 nonprofit organization. This includes the vast majority of postsecondary institutions in the United States, ranging from community colleges that grant associate degrees to large universities with doctoral programs.
The tax-exempt status of 501(c)3 schools also encompasses many seminaries. So long as a seminary is a non-profit according to the IRS, the school is probably tax-exempt.
For-Profit Schools Are Often Not Tax-Exempt
Tax-exempt status usually doesn’t apply to for-profit schools, a category which includes a growing number of colleges and universities. Because these institutions are ultimately businesses that seek to provide investors with returns, the schools generally aren’t tax exempt.
While generally not tax exempt, for-profit schools still have many legitimate business expenses that may be deducted from revenues.
Likewise, seminary schools that are run as for-profit businesses often don’t receive tax-exempt status. Any seminary that’s not structured as a 501(c)3, but rather an LLC, S Corporation, C Corporation or B Corporation probably qualifies as a taxable business.
Accreditation Generally Doesn’t Affect Tax Status
Notably, a school’s tax status usually isn’t influenced by accreditation. Both accredited and unaccredited schools — including seminaries — may be structured as 501(c)3s or a for-profit business entity. They’re generally taxed according to this structure rather than the rigors of their academics.