• Key point: Property leased by a church for use as a parking lot may not be exempt from property taxes in some states.
• An Illinois appeals court concluded that a parking lot leased by a church for use by its parishioners was not exempt from property taxation under Illinois law. A church leased a building and 3 vacant lots for use by its congregation. The building was used for worship services, and the vacant lots were used as parking lots. A tax assessor determined that all of properties were subject to property tax since they were owned by a secular business rather than by the church. A state appeals court ruled that the building was exempt from tax. It based this conclusion on a state law exempting “all property used exclusively for religious purposes” from tax. The court noted that under this law “the taxable status of property is determined by its use, not by its ownership.” However, the court concluded that the 3 vacant lots used as a parking lot were taxable. It referred to another state law that restricted the exemption of church parking lots to those lots that are owned by a church. Since the parking lot in question was not owned by the church, it was not exempt from taxation. The court acknowledged that this result was unfair. It observed: “Although we fell that the result is unfair, we must agree with the [state] that imposition of taxes on the vacant lots is in accordance with the law. . . . We sympathize with [the church]. However, the imposition of taxes is not necessarily fair and a court must follow the voice of the law, which sometimes does not agree with the voice of reason. Therefore, regrettably, we must exhort [the church] to follow the teachings of their biblical leaders and ‘render unto Caesar the things that are Caesar’s.'” Faith Christian Fellowship v. Department of Revenue, 589 N.E.2d 796 (Ill. App. 1 Dist. 1992).
See Also: Property Taxes
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