• Key point. Church-owned vacant land may be exempt from taxation if it is used at least occasionally for religious purposes.

A Colorado court ruled that two vacant lots owned by a church were exempt from property tax because they were used one day each year for religious purposes. This ruling will be of relevance to any church that is paying property taxes on vacant land. The church in question owned two vacant lots-one near the church, and the second some distance away. The church was the only user of the two lots, and used each lot one day each year for activities that it claimed were in furtherance of its religious mission. The church hoped to construct structures on each lot for church use, but it lacked the funds to do so. A local tax assessor ruled that the lots did not qualify for exemption because the quantity and extent of the church's use was insufficient. A board of tax appeals reversed the assessor's ruling, noting that the church actually used the lots "on a limited basis" and was "the only user" of the properties, and that the limited funding available to the church to improve the properties should not "keep the properties from being tax exempt." The tax assessor appealed, and a state appeals court upheld the exemption of the two lots.

The court began its opinion by quoting the Colorado property tax exemption statute, which grants a property tax exemption to property "which is owned and used solely and exclusively for religious purposes." The court concluded: