House Churches and Property Tax Exemptions

Court rules house church not tax exempt.

Church Law and Tax 1996-03-01

Taxation—church property

Key point. A religious radio station may be exempt from property tax as a “house used exclusively for religious worship.”

An Ohio court ruled that a nonprofit, religious radio broadcast facility was exempt from property tax as a “house used exclusively for religious worship.” A religious radio station purchased 7 acres of land to construct new offices and a new broadcasting studio and radio tower. Its application for an exemption from property tax was denied. The station appealed this ruling in court, and a state appeals court ruled that the property was entitled to an exemption under a state law exempting “houses used exclusively for public worship.” The court conceded that the term “houses used exclusively for public worship” could be interpreted to apply to “structures in which the worshipful rites and ordinances of a religious society are celebrated or observed by members of the society.” However, it refused to interpret the term this narrowly. It observed:

Today, people may share mutual interests and relationships through institutions that rarely, and sometimes never, involve assembly of those who share in that membership. Communication of the common culture is accomplished by electronic means, and is not limited to the reach of the human voice …. Since the early decades of this century, religious programs have been a major part of radio broadcasting in this country …. Radio broadcasts of religious programs do not constitute an institutionalized church, which is the traditional form of religious society. However, for purposes of the tax exemption concerned, the test does not concern the form of a religious society but the fact of its existence. The programs broadcast by [the radio station] are primarily religious, and they are received for a worshipful purpose by those who subscribe and listen to them. The broadcast and reception constitute a form of public worship and the persons who participate in those exercises constitute a religious society. The property for which [the station] seeks an exemption is used primarily to facilitate the celebration and observance of that particular religious society.

We conclude that the term “house” as used in connection with the concept of public worship … must be construed broadly to satisfy the requirements of [the state constitution’s protection of religious liberty]. If it is limited to structures at which the members of a religious society gather in congregation to worship, that usage necessarily gives those societies a “preference” in the form of a tax exemption over other religious societies which do not assemble in that fashion, or do not assemble at all. [The state constitution] prohibits such preferences and any law which creates them ….

A “house used exclusively for public worship” … must accommodate a structure or facility that is used exclusively or primarily to propagate a religious message to persons who receive that message for a worshipful purpose. Those who engage in that activity constitute a form of religious society, whether they are gathered where the religious message originates or are dispersed elsewhere. World Evangelistic Enterprise Corporation v. Tracy, 644 N.E.2d 678 (Ohio App. 2 Dist. 1994). [ State Property Taxes]

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