Recent Developments

Issues that affect ministers and churches
Recent Developments in Illinois Regarding the Taxation of Church Property
An Illinois court ruled that a church's parking lots, a storage building, and a former sanctuary that had been badly damaged in a fire, were all exempt from property taxation.
Illinois
State:
Key point. The exemption of church property from property taxation extends to auxiliary buildings and parking lots that facilitate the accomplishment of the church's exempt purposes.

An Illinois court ruled that a church's parking lots, a storage building, and a former sanctuary that had been badly damaged in a fire, were all exempt from property taxation. In 1992, a church sought a religious-use property tax exemption for various parcels of real estate in Chicago. A state agency denied the application, and the church requested a formal hearing to determine whether the parcels warranted exemption. At the hearing, the church requested exemption for the following properties: (1) a burned church building; (2) a private school located directly east of the burned church; (3) a large storage building; and (4) various parking lots. The burned church building had been damaged by a fire a few years earlier. The fire resulted in the relocation of worship services and other church activities to the school building. A judge determined that the school was exempt, as were the parking lots associated with it. However, the judge concluded that the burned church was not exempt even though the congregation intended to rebuild it when they received the proceeds from an insurance policy, since its condition prevented it from being used for religious purposes. Further, the storage building was "in a dilapidated condition that rendered it unsuitable for regular use" and therefore was not exempt. The judge also noted that the church had failed to show how the storage facility furthered its exempt purpose and concluded that the storage building was not reasonably necessary to further the church's exempt operations.

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Posted: November 1, 1999
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