Church Property

Church Law and Tax 1989-03-01 Recent Developments

Taxation – Church Property

Does property used exclusively for religious worship automatically remain exempt from property taxation when it is sold from one church to another? No, concluded a Colorado state appeals court. In 1984, a Coptic Orthodox church (“St. Mark”) purchased property from a Nazarene church that was exempt from property taxation as of the date of sale. The Nazarene church notified local authorities of the sale, and the property was removed from the listing of exempt properties. When St. Mark received a tax bill for 1984, it immediately applied for an exemption. Local authorities denied the exemption on the basis of a Colorado law that specifies “in no event shall [an] exemption apply to any year prior to the year in which application is made.” Since St. Mark did not apply for an exemption during 1984, it was denied an exemption for that year. On appeal, the state appeals court upheld the denial of an exemption for 1984: “Contrary to St. Mark’s argument, the exemption is not perpetual; it is dependent upon the use to which the property is put. It does not run with the land. Thus, St. Mark had no automatic right to the exemption and was required to comply with statutory prerequisites to so qualify …. [Under state law], St. Mark was required to file an application for exemption when it purchased the property to enable the property tax administrator to determine whether the property was being used for religious worship. There is a presumption against exemption, and the burden is on the taxpayer who claims an exemption to establish the right to it by showing that it has met the necessary criteria.” And, since “St. Mark, as the property owner, did not apply for an exemption for the 1984 tax year,” the tax administrator correctly denied the exemption for that year. The court also ruled that the tax administrator’s failure to notify St. Mark’s of the need to file an exemption application upon the purchase of the property did not deny the church any legally protected right. St. Mark Coptic Orthodox Church v. Colorado State Board of Assessment Appeals, 762 P.2d 775 (Colo. App. 1988).

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