Taxation—Church Property

A Tennessee court ruled that a church-owned home did not qualify for exemption from property taxation.

Church Law and Tax 2004-07-01

Taxation—church property

Key point. Church parsonages are exempt from property taxation in some states.

* A Tennessee court ruled that a church-owned home that was used solely as a residence for visiting missionaries did not qualify for exemption from property taxation. A deceased woman’s estate left her home to her church to be used “for the temporary housing and convenience of the missionaries of said church.” The church asked the tax assessor for a ruling that the home was exempt from property taxation because it was used purely and exclusively for carrying out the religious purposes of the church. The assessor denied the exemption, and the church appealed. Tennessee law exempts from property taxation “the real and personal property, or any part thereof, owned by any religious … institution which is occupied and used by such institution or its officers purely and exclusively for carrying out thereupon one (1) or more of the purposes for which the institution was created or exists … and provided further, that no church shall be granted an exemption on more than one (1) parsonage, which shall include not more than three (3) acres of land except as hereinafter provided; and provided further, that no property shall be totally exempted, nor shall any portion thereof be pro rata exempted, unless such property or portion thereof is actually used purely and exclusively for religious … purposes.” The court concluded, “We do not believe using the house for overseas missionaries temporarily returning to the United States constitutes an exempt use under the statute. This is not a use which is directly incidental to or reasonably necessary for the church to accomplish its missionary work …. While the religious purpose of the church may be incidentally served by the temporary housing of missionaries, this incidental use and benefit does not bring the property within the statutory exemption.” First Presbyterian Church v. Tennessee Board of Equalization, 2003 WL 21994804 (Tenn. 2003).

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