One of the dearest things to churches is owning their own facilities. Most churches today start out in a living room, school cafeteria, daycare, or hotel conference room. As they grow they usually rent a facility, with the hope of one day buying land and building their own facility. This dream is now under attack by hostile local governments. Cash strapped, many county governments have begun to look for ways to make churches pay property taxes. Let me give you four local government attempts to tax churches.
The room by room strategyA church in New Hampshire was taxed by the city of Concord on forty percent of its facilities, claiming that certain rooms such as storage closets, upstairs bathrooms, and other rooms were not used for religious worship and were, therefore, subject to property tax. When the church disagreed, it had to take its fight to court and the New Hampshire Supreme Court ruled 4-0 in favor of the city. At the present moment, all churches in New Hampshire are subject to a room-by-room assessment of their property.
Refusal to comply with public policyThe state of New Jersey revoked the property tax exemption of a Methodist group because they refused to rent their facilities for the purpose of performing a same sex civil union. I see that in the near future many states and even local governments will pass laws that will put churches at odds with them. These laws usually require that churches engage in or allow certain activities that are in conflict with their doctrines and sincerely held beliefs.
Building on your facilitiesA church in Florida had to pay $40,000.00 in property taxes on the land they purchased. At the time they purchased it, it was raw land. They soon began to develop it and built a new sanctuary. Some time later the county assessed a property tax on the church stating that during the time they were in construction the land was not being used for religious worship and therefore it was subject to the property tax. More than ever, it is important that you assess the way you are using your church's property to ensure that all of it is being used for the church's religious purposes.
Taxing church attendanceThe city of Mission, KS adopted an ordinance that taxed a church based on the number of trips in and out of the church's driveway. The city was desperate for new tax revenues. So, naturally it went after churches, which are exempt from property tax. In essence, this ordinance taxes a church based on its attendance.
Staying ahead of the curveWith so much to do and so little time to do it, how is a church supposed to stay ahead of the curve? Not only is a church supposed to stay compliant with hundreds of laws and regulations, it now has to keep watch for new and wacky laws by local governments trying to raise additional tax revenues.
You never know whenA church in Chicago, IL lost its facilities because it was assessed taxes for "unidentified taxable activities." The worst part is that the tax bill was mailed to the wrong address. When the church finally discovered that it had an unpaid tax, the county had already foreclosed on its property. As I researched this article a thought came to mind. Many thousands of churches rely on the timely publication of the StartCHURCH news blogs as a way to stay up to date with the changing laws and tax issues that affect them. We want to encourage you this week to stay faithful to reading these blogs because you never know when one will be the answer to your prayers.
(c) Paul Rivera