Doulos Chapel argues with city for tax exemption status on water bill

Published: Jan. 24, 2023 at 6:20 PM EST
Email This Link
Share on Pinterest
Share on LinkedIn

SOUTH BEND, Ind. (WNDU) - A South Bend church is in hot water for failing to pay its water bill. Or, in this case, for refusing to pay its water bill.

“We’ve had calls of people saying hey, we’ll put up the money, and I tell them it’s not about the money,” said Doulos Chapel Pastor Mario Sims. “This is not; this is about a principal here, that you’re charging a church, and you’ve done it for years knowing the church is a not-for-profit.”

Pastor Sims says it was in 2015 when he first noticed that the water bills included a state sales tax charge. He says he provided the city with documentation of the church’s tax-exempt status and put the city on notice that any future bills that included a state sales tax would not be paid. “Thinking that, well, that will immediately trigger a response, and they’ll correct this and not charge us taxes and put it in the church name. Well, they dug in.”

On Monday, Sims noticed that the water to the building had been shut off.

“I feel bad for the population we serve in this area; we serve the homeless, and they rely upon us to have our doors open to care for them, and we’ve been shut down since Monday.”

Doulos Chapel routinely offers homeless individuals a place to shower and hosts support groups for veterans.

Pastor Sims produced correspondence showing that the city recently offered to credit the church account by $211.80, an amount equal to the sales taxes charged from July of 2013, through December 2022.

Sims insists that the entire balance of more than $5,000 be forgiven. “This just presents a situation that, ethically, we have to stand on morals and say respond to our tax-exempt status. The state has, and the county has, and the federal government has. This could set a very bad precedent for nonexempt organizations and churches, and I guess the greater question is why our church? Why you doing this to our church?

In response to the story, the South Bend Department of Public Works wrote that nonprofit organizations seeking a sales tax exemption must fill out the Indiana Utility Exemption Form ST-109NP&G and provide it directly to the utility. The name provided on the form needs to match the name on the utility account in order for the city to legally provide the exemption.

The city issued a refund for taxes paid when the organization’s name provided on the form matched the name on the utility account.