Property Leased by For-Profits to Religious Groups May Not Be Tax Exempt

Victory Church v. Illinois Department of Revenue, 637 N.E.2d 463 (Ill. App. 1 Dist. 1994)

Key point: Property tax exemptions generally are strictly construed, and all doubts resolved against exempt status.

Key point: Property that is leased by a church from a for-profit business is not entitled to exemption from property taxation in some states even if it is used exclusively for religious purposes.

An Illinois court ruled that a building owned by a for-profit business and leased to a church for exclusively religious purposes was not entitled to an exemption from property tax under Illinois law.

A church leased a 2-story building and three vacant lots from a for-profit company. The building was used for church purposes and the vacant lots were used for parking. A state appeals court ruled that the properties were not exempt from tax. The court began its opinion by noting that it had to decide ...