An ongoing property tax assessment battle between Concord, N.H., and a 50-member church there has led to the church putting its property up for sale to make ends meet, according to a recent article in the Concord Monitor.
Four years ago, the city assessed taxes for the property after it determined 60 percent of it wasn't used for religious purposes. The Destiny Christian Church, a Pentecostal congregation, owns a two-story building, a parsonage, and 26 acres, according to the newspaper article.
The church disputed the tax bill, but the Board of Tax and Land Appeal sided with the city. This summer, the appeal was approved to go to the state Supreme Court.
The church's pastor told the Concord Monitor that the church paid $13,000 owed for the 2008 bill earlier this year. The church determined it couldn't afford to pay what is still owed on top of its normal expenses; combined with what church leaders decided was an inconvenient location, he said the decision was made to put the property up for sale.
A similar case in Kentucky that ended in a state Supreme Court ruling was featured in the January/February 2011 issue of Church Law & Tax Report, where Richard Hammar writes:
Undeveloped church-owned property generally is not exempt from property taxation. However, some courts have ruled that such property may be exempt from taxation if its sole, though infrequent, use is for religious purposes.
In a free lesson on this topic on ChurchLawAndTax.com, Hammar also mentions that the extent of the property tax exemption of church-owned property varies from state to state.
The annually released Church & Clergy Tax Guide, written by Hammar, includes a table with the text of each state's property tax exemption for church property (Table 12-4). For New Hampshire, Hammar cites the following state revenue statute:
The following real estate and personal property shall, unless otherwise provided by statute, be exempt from taxation …. III. Houses of worship, parish houses, church parsonages occupied by their pastors, convents, monasteries, buildings and the lands appertaining to them owned, used and occupied directly for religious training or for other religious purposes by any regularly recognized and constituted denomination, creed or sect, organized, incorporated or legally doing business in this state and the personal property used by them for the purposes for which they are established. (page 683)
Churches that own large properties should research the statutes in their states to determine what type of potential taxes their local municipalities may attempt to assess, especially as coffers continue to shrink across the country in the midst of a struggling economy.
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