Key point: Some states exempt parsonages from property taxes, but the definition of a "parsonage" is limited in some states to homes owned by churches and occupied by clergy who serve a local church.
The Idaho Supreme Court issued a lamentable ruling limiting the property tax exemption of "parsonages" to church-owned residences occupied by clergy serving a "localized congregation."
Idaho law exempts parsonages from property taxes. For many years, a home owned by the Mormon church and occupied by the president of the Idaho mission was considered to be exempt from property taxes as a parsonage. The president is an ordained minister who devotes his full time to overseeing the spiritual and physical needs of 157 lay missionaries in his jurisdiction. The president conducts weekly religious services for the missionaries, and visits each one at least monthly.
The president's home is used not only as a residence for the president, but also as a short-term residence for missionaries who are just beginning or ending their assignments. A county tax assessor's office determined in 1987 that the president's home did not qualify for exemption as a parsonage. A trial court later ruled that the home was exempt, and the case was appealed to the state supreme court.
The supreme court agreed with the tax assessor that the home was not exempt. The court quoted the definitions of the term "parsonage" in several dictionaries, concluding that "it is evident that all of the dictionaries refer to a residence occupied by the incumbent minister having ecclesiastical domain over a contained body of parishioners or church members, formally referred to as a congregation …. It is not clear that the legislature intended to extend the word 'parsonage' … to include any property housing any minister."
The court concluded: "We hold that a parsonage is not merely a residence owned by a religious organization in which an ordained member of that organization resides. The definition of 'parsonage' as employed by [state law] is a building owned by a religious organization occupied as a residence by a designated minister who ministers to a specific localized congregation that gathers to worship at frequent and regular intervals."
The court pointed to rulings in several other states that reached a similar conclusion (Maryland, Massachusetts, Michigan, New Jersey, Tennessee, Washington, Wisconsin), and to a statute in another state (Illinois) that specifically broadens the property tax exemption of parsonages to include housing occupied by clergy whether or not they serve a specific local congregation. In defending its conclusion, the court noted, "the localized congregation requirement is based on sound policy that, since the … tax burden of exempted property will be shifted onto the people of the county, those people should receive something in return—a place to worship in the community and a minister to conduct the services."
It was a dissenting Justice who reached the correct conclusion: "I would [recognize] that both 'parson' and 'parsonage' are archaic terms from an earlier era" and that the term parsonage "is nothing more than a clergyman's house." Corporation of Presiding Bishop v. Ada County, 849 P.2d 83 (Idaho 1993). See also Ada County v. Roman Catholic Diocese, 849 P.2d 98 (Idaho 1993).
