Sometimes. Iowa law provides that these protections do not apply to religious institutions with respect to any religion-based qualifications when such qualifications are related to bona fide religious purpose. Where qualifications are not related to a bona fide religious purpose, churches are still subject to the law’s provisions. (e.g. a child care facility operated at a church or a church service open to the public).The complaint alleges that the church invites the public to all its services and events, and that even those that are not overtly religious nevertheless "engender other important elements of religious meaning, expression, and purpose." It goes on to allege in part:
13. The Church believes and teaches that maleness or femaleness is designed by God and is tied to biology, chromosomes, physiology, and anatomy.
14. The Church’s religious beliefs mandate that sex is an immutable trait from which springs the natural and healthy desires for physical privacy and modesty in states of partial or full undress, such as in restrooms, showers, and changing rooms.
15. The Church recognizes that some individuals do not identify with their biological sex, and the Church welcomes those individuals, wants to be a blessing to them, and wants to minister to them.
16. The Act and City Code prohibit the Church from issuing statements that might cause individuals to believe that they are unwelcome because of their perceived gender identity.
17. The language of the Act and the City Code are broad enough to include within that prohibition sermons, theological expositions, educational speeches, newsletters or church worship bulletin text, or other statements from the Church and its leaders....
27. Allowing biological males to use facilities reserved for women and girls, and vice versa, violates the Church’s religious beliefs about human sexuality.Des Moines Register reports on the lawsuit.
UPDATE: Shortly after the lawsuit was filed, the Iowa Civil Rights Commission revised its interpretive pamphlet (full text) to read:
Places of worship (e.g. churches, synagogues, mosques, etc.) are generally exempt from the Iowa law’s prohibition of discrimination, unless the place of worship engages in non-religious activities which are open to the public. For example, the law may apply to an independent day care or polling place located on the premises of the place of worship.