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The Risk of Losing Church Property in a Tax Sale

Recent case illustrates need for churches to monitor the tax status of their property.

Background. Occasionally, a church will inadvertently lose its property tax exemption due to a failure to comply with a technical provision of the property tax law. This may occur due to a failure to renew an existing exemption by filing a required form. When this happens, the local taxing authority may be empowered to sell church property to collect the delinquent property taxes. This scenario happened in a recent case.

From 1986 through 1998, a church's parking lot had been listed on the county tax assessment rolls as exempt from taxation. From 1999 through 2003 the parking lot was moved to the tax assessment rolls and no longer was considered exempt. Upon discovering this, the church obtained legal counsel to correct the assessment rolls to reflect the property's tax-exempt status.

In 2003 the church filed a petition with a local board of tax appeals for reinstatement of the exemption for ...

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Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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Posted:
  • April 2, 2007

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