A church tax is a tax imposed by the state on members of some religious congregations to provide financial support of churches, such as the salaries of its clergy and to pay the operating cost of the church. A church tax is imposed in Austria, Denmark, Finland, Germany, Iceland, Italy, Sweden, some parts of Switzerland and several other countries. In Spain and Portugal paying a church tax is optional.

The constitution of a number of countries such as the United States could be and have been interpreted as both supporting and prohibiting the levying of taxes unto churches; prohibiting church tax could separate church and state fiscally, but it could also be favorable treatment by the government. It is explicitly prohibited in India for the state to levy taxes on religious grounds under Article 27 of the Constitution of India. In Australia there is no specific constitutional exemption. Section 116 of the Constitution of Australia precludes the Commonwealth of Australia (i.e., the Federal parliament) from making laws for establishing any religion, imposing any religious observance, or prohibiting the free exercise of any religion, but it does not make any specific reference to taxation. Religious organisations are however exempt by virtue of legislation by the various Federal & State parliaments giving them charitable status.

Austria
Every recognized religious group in Austria can collect church tax at a rate of 1.1%, though currently only the Catholic Church makes use of that opportunity. Church tax is compulsory for Catholics in Austria. This tax was introduced by Adolf Hitler in 1939. After World War II, the tax was retained in order to keep the Church independent of political powers.

Denmark
Further information: Church of Denmark
The members of the national Church of Denmark pay a church tax, called "kirkeskat". The rate varies among municipalities with a minimum of 0.4% and a maximum of 1.3% of taxable income in 2019. The tax is generally around 0.7% of taxable income. The collection of the church tax is administered by the Danish tax authorities, but the church tax is not considered as a genuine tax by, for example, Statistics Denmark, but as a "voluntary transfer from households to the state".

The church tax does not cover the entire budget of the Church of Denmark. An additional 9% is paid by the government through block grants ("bloktilskud"wink, which means that people who are not members of the Church of Denmark also finance its activities through taxes.[8]

Finland
All members of either the Evangelical Lutheran Church of Finland and the Finnish Orthodox Church (the two state churches of Finland) pay an income-based church tax of between 1% and 2%, depending on the municipality. On average the tax is about 1.4%.

Formerly, to stop paying church tax, one had to formally leave the church by personally going to local register office and waiting during an allowance of time for reflection. This requirement was removed in 2003 and currently a written (but not signed) statement to the church suffices. The majority of resignations since 2005 are now handled through a web site, Eroakirkosta.fi. If one is a member of the church when the year begins, they will pay taxes for the whole year. Studies show that church membership resignations in Finland are mainly due to the general secularization of society, not because of tax avoidance.

Sweden
The members of Church of Sweden pay church fee, which varies between municipalities, but can be as much as 2%. Church and state are separated as of 2000; however, the burial tax (begravningsavgift) is paid by everyone regardless of membership.

In a recent[when?] development, the Swedish government has agreed to continue collecting from individual taxpayers the annual payment that has always gone to the church. But now the fee will be an optional checkoff box on the tax return. The government will allocate the money collected to Catholic, Muslim, Jewish and other faiths as well as the Lutherans, with each taxpayer directing where his or her taxes should go.

Switzerland
There is no official state church in Switzerland. However, except Geneva and Neuchâtel, each canton (state) financially supports at least one of the three traditional denominations – Roman Catholic, Old Catholic (in Switzerland Christian Catholic Church of Switzerland), or Evangelical Reformed – with funds collected through taxation. Each canton church tax may formally have to leave the church.[clarification needed] In some cantons private companies are unable to avoid payment of the church tax.

In Geneva and Neuchâtel there is no church tax : each taxpayer is free to make a voluntary tax deductible contribution or gift to his church, either directly to the beneficiary or using the canton (state) tax system.

United States
In the United States, the Establishment Clause of the US Constitution prevents the US federal government and (through incorporation doctrine), the 50 state governments from imposing church taxes. In 1947, the US Supreme Court ruled in Everson v. Board of Education that "No tax in any amount, large or small, can be levied to support any religious activities or institutions, whatever they may be called, or whatever form they may adopt to teach or practice religion."

In the past, some states established state religions and imposed church taxes to provide financial support; indeed, after the ratification of the Bill of Rights, the Establishment Clause protected these state churches from interference by the US Congress.[citation needed] In Massachusetts and Connecticut, the Congregational church was tax supported. In colonial South Carolina, the Anglican Church benefited from church taxes

Iceland
Taxpayers in Iceland who belong to an officially registered religious group or secular humanist organization must pay a congregation tax (Icelandic: sóknargjald, plural sóknargjöld) which is deducted from income taxes and goes to the individual's respective organization. In the past, the sóknargjald of those who do not belong to any recognized religious organization went to the University of Iceland, but this was changed in 2009. In cases of individuals not belonging to a registered religious group or secular humanist organization, the amount that would otherwise be used for the sóknargjald remains now part of the income tax budget. In 2015, the monthly sóknargjald amounted to 824 Icelandic krónur,about $US6.

The Church of Iceland receives governmental support beyond the congregation taxes paid by its members

Italy
Taxpayers in Italy pay a mandatory eight per thousand tax, and have the option to choose to whom they will assign the monies. This tax amounts to 0.8% of the total income tax (IRPEF) and every taxpayer can choose the recipient of the contribution on their tax form. Regardless of whether the taxpayer expresses a preference or not, the 0.8% is already included in their tax levy.

Currently the choices are:

Italian State
Catholic Church
Waldensian Evangelical Church
Seventh-day Adventist Church
Assemblies of God in Italy
Union of the Jewish Communities in Italy
Lutheran Evangelical Church in Italy
Baptist Evangelical Christian Union of Italy
Greek Orthodox Archdiocese of Italy
Apostolic Church in Italy (Pentecostalism)
Italian Buddhist Union
Italian Hindu Union

If the choice is not expressly declared on the tax form, the tax is distributed according to the percentages of the taxpayers who have declared their choice of beneficiary. While it was intended that the state should use its own share of the 0.8% tax for social or cultural purposes, in practice it has employed it for general purposes including its military mission in Iraq in 2004 and the upgrading of prison infrastructure in 2011.

https://en.wikipedia.org/wiki/Church_tax