Italy And Taxing The Church: Making Change
Carol Matlack writes at Bloomberg Businessweek that change is being made in Italy in the Church's tax status:

Under Italian law, most buildings owned by the Catholic Church are tax-exempt, even if used for commercial purposes.

That could soon change. In an announcement posted Feb. 15 on the government's website, Italian Prime Minister Mario Monti said he would seek legislation requiring the church to pay taxes on all its commercial holdings. About one-third of the 100,000 properties owned by the church in Italy are used for commercial ventures, according to Italy's Radical Party, which has long campaigned against the tax exemption.

Existing laws say that church-owned buildings used for "purely commercial" purposes are to be taxed. But many ventures, such as the Santuario della Verna guesthouse, remain exempt because they are attached to properties used for religious purposes. (Property within Vatican City, which is a sovereign state and therefore not subject to Italian laws, would not be affected by the government's plan.)

Via Marginal Revolution, where Emanuele writes in the comments:

Catholic Hostels with Tax Exemption (were) unfairly competing with normal ones. A 10% margin can be quite a big advantage in a free market. The problem was not only related (to) Catholic institutions by the way. On the same page, enjoying Tax Exemption on unrelated activities, there were political associations and labor unions.

(I think English isn't her first language so I made a few corrections -- see parentheses.)