Evaluate Property Tax Exemptions Annually
Evaluate Property Tax Exemptions Annually
Time to review or apply for property tax exemptions.

Most jurisdictions provide relief from property taxes to qualifying churches that own real property (e.g., land and buildings) and/or personal property (e.g., furniture, equipment, leasehold improvements) located in that jurisdiction. Generally, exemptions are based on the ownership and use of the property, although different states have different rules regarding what types of entities and what uses qualify for exemption.

While property taxes are assessed and exemptions are evaluated differently in various states, in many states, this is the time of year when property tax exemption applications or renewals must be addressed. Therefore, if your church has not already done so, Batts Morrison Wales & Lee recommends reviewing the practical reminders and recommendations below to determine whether further analysis and evaluation of your church’s property tax exemptions are required.

Practical Reminders and Recommendations

  • Review your church’s prior year tax bill or online account to determine whether the church has historically received exemption based on its nonprofit status. If not, consider whether the property might qualify for exemption and, if so, the related exemption application filing requirements and due dates.
  • For property that has historically been granted an exemption, determine the implications of any changes to the use of that property, along with the related notification requirements.
  • Determine the potential filing requirements and exemption application due dates resulting from the purchase of new property.
  • If uncertain about the available exemptions in your state, consider contacting your local taxing jurisdiction (or visiting its website) to anonymously inquire about potential property tax exemptions that may be available to your church (specifically inquire about any property tax exemption application deadlines and the necessary documentation that must be submitted in order to qualify).
  • Contact your tax counsel if you are being notified that your property tax exemptions are being reduced or removed for the upcoming tax year, or if you need assistance in addressing any of the property tax exemption issues noted above.

Understanding the available exemptions and the necessary filing requirements is proving to be more important than ever for churches. Our firm has noticed a recent trend in denials of property tax exemptions in numerous jurisdictions across a number of states as cities and counties look for ways to meet operating budgets.

Adapted from a Nonprofit Special Alert originally published by Batts Morrison Wales & Lee (BMWL). Used with permission.

Posted: January 14, 2020

Like This Article?

If you enjoyed reading this article, get more like it. Become a Church Law & Tax member today.

Learn more

Already a member? .

View All
from our store
2020 Church & Clergy Tax Guide

2020 Church & Clergy Tax Guide

Find comprehensive help understanding United States tax laws as they relate to pastors and churches.
Church Finance

Church Finance

Learn about budgeting, financial reporting, tax compliance, insurance coverage, and more.
Charitable Contributions Bulletin Inserts

Charitable Contributions Bulletin Inserts

Help your members give more by answering their charitable giving and tax law questions.
Politics and the Church

Politics and the Church

Tax and legal guidelines faith-based organizations need to know before jumping into the political fray.

ChurchSalary

ChurchSalary

Let ChurchSalary do the work. Get personalized compensation reports for staff and pastors.