Church Property Leased to Parishioners Not Tax Exempt

Property was used as parking lots.

Church Law and Tax 1993-03-01 Recent Developments

Taxation – Church Property

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

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

ajax-loader-largecaret-downcloseHamburger Menuicon_amazonApple PodcastsBio Iconicon_cards_grid_caretChild Abuse Reporting Laws by State IconChurchSalary Iconicon_facebookGoogle Podcastsicon_instagramLegal Library IconLegal Library Iconicon_linkedinLock IconMegaphone IconOnline Learning IconPodcast IconRecent Legal Developments IconRecommended Reading IconRSS IconSubmiticon_select-arrowSpotify IconAlaska State MapAlabama State MapArkansas State MapArizona State MapCalifornia State MapColorado State MapConnecticut State MapWashington DC State MapDelaware State MapFederal MapFlorida State MapGeorgia State MapHawaii State MapIowa State MapIdaho State MapIllinois State MapIndiana State MapKansas State MapKentucky State MapLouisiana State MapMassachusetts State MapMaryland State MapMaine State MapMichigan State MapMinnesota State MapMissouri State MapMississippi State MapMontana State MapMulti State MapNorth Carolina State MapNorth Dakota State MapNebraska State MapNew Hampshire State MapNew Jersey State MapNew Mexico IconNevada State MapNew York State MapOhio State MapOklahoma State MapOregon State MapPennsylvania State MapRhode Island State MapSouth Carolina State MapSouth Dakota State MapTennessee State MapTexas State MapUtah State MapVirginia State MapVermont State MapWashington State MapWisconsin State MapWest Virginia State MapWyoming State IconShopping Cart IconTax Calendar Iconicon_twitteryoutubepauseplay