The Tax Court of Indiana ruled that an undeveloped tract of church-owned property was exempt from property taxation under Indiana law.
The land had been purchased by the church under a "land sales contract" providing for the transfer of title to the church only after payment of the full purchase price over a term of two years. The church claimed that the property was exempt from taxation under a state law exempting "land … purchased for the purpose of erecting a building which is to be owned, occupied, and used" for exempt purposes.
The state board of tax commissioners rejected the church's claim of exemption, arguing that the church could not be considered to have "purchased" property that it held under a land sales contract. The tax court upheld the church's claim of exemption, noting that the church planned to erect a new sanctuary on the property and that it satisfied the definition of a "purchaser" when it entered into the land sales contract.
Community Christian Church, Inc. v. Board of Tax Commissioners, 523 N.E.2d 462 (Ind. T.C. 1988)