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TexLaw, Attorney
Category: Legal
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Experience:  Lead trial/International commercial attorney licensed 11 yrs
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In the state of Florida, is a church allowed to provide interest

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In the state of Florida, is a church allowed to provide interest free loans to its pastor?

Thank you for your question.

Florida law prohibits such loans in general. See Florida
Statutes Section(NNN) NNN-NNNN Loans to directors or officers.

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Thanks and please let me know if you have any further questions in this regard.

Customer: replied 4 years ago.

so if this type of loan was made, is the church jeoperdizing its tax free status...last question then I will rate...thank you

No. Even though this transaction is not authorized, it does not endanger the Church's non-profit status. In fact, many states other than Florida do allow such transactions.

There is tax liability for the pastor though and it is possible that the pastor could be sued by the Church for authorizing such a loan.

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