Taxation—Church Property

The Pennsylvania Supreme Court ruled that a church’s parking lot was exempt from property taxation.

Church Law and Tax 2006-11-01

Taxation—church property

Key point. Church parking lots that are reasonably necessary to the existence of a church are entitled to exemption from property tax.

* The Pennsylvania Supreme Court ruled that a church’s parking lot was exempt from property taxation. A church experienced a significant increase in attendance at its worship services, with the number of people attending services far exceeding the limited off-street and on-street parking that was available. As a result, the church purchased adjacent land that it turned into a large parking lot. It filed an application with a city tax assessor seeking an exemption from real estate taxation for the parking lot. The tax assessor denied the request, and the church appealed to a local court. The court found the parking lot was reasonably necessary for the occupancy and enjoyment of the church and ruled that it was tax-exempt. The city appealed to the state supreme court.

The supreme court began its opinion by noting that the state constitution exempted from property tax ‘all churches, meeting-houses, or other actual places of regularly stated religious worship, with the ground thereto annexed necessary for the occupancy and enjoyment of the same.’ In a 1959 ruling, the supreme court ruled that church parking lots are not exempt from taxation since they are not “actual places” of religious worship and are not “necessary” for occupancy and enjoyment. Second Church of Christ Scientist of Philadelphia v. City of Philadelphia, 157 A.2d 54 (Pa. 1959).

The court noted that ‘times have changed since Second Church was decided in 1959. In this day and age, parking lots may be a necessity for a church, rather than just a convenience. People and churches have both moved away from towns, and many people are no longer living within walking distance of their church. To attend, they are required to drive and park a vehicle. With no available parking, church-goers may be forced to seek religious expression elsewhere, causing a decrease in membership and impeding the ability of the church to exist.’ The court further observed:

The church has established that its parking lot is entitled to an exemption because it is ‘necessary for the occupancy and enjoyment of [the church].’ Testimony established the parking lot was reasonably necessary and the church could not exist without it. Based on this testimony, the granting of the tax exemption was in compliance with both the Constitution and state law as being necessary.

The court stressed that not all church parking lots are entitled to tax-exempt status. However, ‘if a church proves its parking lots are a reasonable necessity to the existence of the church itself, those lots are entitled to such status.’ Wesley United Methodist Church v. Dauphin County Board of Assessment, 889 A.2d 1180 (Pa. 2005).

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