• Key point. Church property that is exempt from property tax may be subject to “special assessments” that specifically benefit the property.
A Florida appeals court ruled that churches can be required to pay “special assessments” only if their property is directly benefited. A county ordinance imposed “special assessments” against various property owners, including churches, to pay for fire and rescue services as well as stormwater management services. A group of churches protested payment of these special assessments, claiming that they were exempt from property taxes. A state appeals court ruled that the exemption of church property from property taxes does not exempt such property from special assessments. However, it acknowledged that the distinction between a property tax and a special assessment is often difficult to make. It concluded that a property tax does not necessarily provide any direct benefit to the property that it taxes, while a special assessment always does. The court observed: “Few would argue, and these churches do not, that churches should not pay for special assessments that are in the form of improvements abutting or contiguous to church property and providing a special benefit to such property. Examples of such special assessments would be sewer lines, sidewalks, and street lights.” The court concluded that fees imposed on churches for fire and rescue services met the definition of a special assessment and therefore could be assessed against a church consistently with the church’s exemption from property tax. The court also pointed out that the churches in question were prevented from challenging these special assessments since they had paid them without protest for twenty years. However, the court concluded that the fees imposed on churches and other property owners for stormwater management services did not directly benefit individual properties and therefore were a property tax rather than a special assessment. As a result, churches were exempt from paying these fees. The court observed:
Stormwater management services are, without question, both necessary and essential. However, such services benefit the community as a whole and provide no direct benefit, special benefit, increase in market value, or proportionate benefit regarding the amount paid by any particular land owner. No evidence was presented of any direct or special benefit to any of the church properties involved in this lawsuit. Accordingly, these stormwater management services do not meet the definition of a special assessment.
The court cautioned that “if services are allowed to routinely become special assessments then potentially the exemption of churches from taxation will be largely illusory.” It noted that a significant number of items “comprising the ad valorem tax base are services by nature,” and that a “domino effect could ensue if special assessments are continually expanded to include generic services.” Sarasota County v. Sarasota Church of Christ, 641 So.2d 900 (Fla. App. 2 Dist. 1994). [ State Property Taxes]
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