Property Tax Exemption Does Not Apply to Municipal Special Assessment

Key point. Churches are exempt from property or ad valorem taxes in every state, but this exemption does not necessarily apply to special assessments that require landowners to pay for improvements that directly benefit them.

A Minnesota appeals court ruled that a city's imposition of a special assessment on abutting landowners to cover the costs of street resurfacing could be applied to churches.

In 2016, a city imposed a special assessment of $31,191.30 against a church related to a street resurfacing project. The church was informed that it was required to pay off the amount in five annual principal installments beginning in 2017. The church challenged the assessment, claiming that it violated a provision in the state constitution exempting from taxation "public burying grounds, public school houses, public hospitals, academies, colleges, universities, all seminaries of learning, ...