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Austin Cline

How Many Tax Exemptions Do Churches Get?

By September 24, 2009

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Tax exemptions for religious institutions is a difficult and contentious issue. Insofar as a church is a non-profit organization, then it's hard to argue that it doesn't deserve the same tax exemptions as any another non-profit group. Problems arise from two areas: first, the fact that churches get a special category of tax exempt status which isn't reviewed as closely as that of other non-profits and second, churches can run many businesses or own a lot of land which have nothing to do with non-profit activities.

Unfortunately, few people seem to be aware of these issues. There seems to be an assumption that churches simply get non-profit status for their houses of worship and what they receive in the Sunday collection plate as if churches are little more than one-room buildings where people gather to worship. We need a greater recognition that churches can also be massive institutions that own millions of dollars in property and control businesses which bring in millions of dollars of revenue each year.

In Monroe County, the value of properties exempted from taxes for religious purposes totaled nearly $756 million in 2008, the last year for which complete data is available.

While most are traditional houses of worship, the tax-free properties included vacant land held for years by churches miles away and houses considered parsonages for churches that hold no other property, a Democrat and Chronicle examination of tax rolls found.

The reason is a state real property tax law that provides wide latitude for religious groups to claim tax breaks and does not define "religious purposes."

Source: Democrat & Chronicle

Even vacant land can be a problem for a local community because this is land which can't be used for any other purpose and which isn't generating tax revenue. This means everyone else has to pay higher taxes in order to maintain the same level of public services. So the more land churches own even just vacant land the more public government is starved for funds... and effectively undermined. For some churches, this may actually be part of the appeal of owning more and more land.

Under the law, churches receive full exemptions on property used for religious purposes. But they can also get a tax break on vacant real estate if they "in good faith contemplated" using the property for religious purposes.

For example, a vacant 70-acre parcel at Winton and Westfall roads in Brighton valued at $2.9 million and owned by Faith Temple Church has been exempt for the last few years because the church has standing plans to build a church, school and housing on the land.

How long a religious organization can contemplate the future of vacant land before its tax-free status is questioned or revoked is open to interpretation.

"The statute doesn't establish a time frame," said Joseph Hesch, spokesman for the state Office of Real Property Services, which supports fairness in local taxes but has no regulatory authority. "It's kind of horses for courses. It's entirely within the local assessors' discretion as to whether a property is exempt and for how long."

St. Vincent DePaul Roman Catholic Church in Churchville has owned 43 acres of untouched woodland in Riga tax-free since 1986.

So churches don't have to abide by strict, objective standards when it comes to owning property that gets tax breaks or tax exemptions everything is dependent on what the local tax assessors decide to do. This makes the process too arbitrary, which isn't good for either the churches or the community. Churches would benefit as much as anyone from clear, objective guidelines so they know how long they have and what they have to do.

At 5,400 square feet with meticulously manicured grounds, a three-car garage and four soaring white pillars gracing its porch, the house on D'Angelo Drive is remarkable even by the standards of its affluent Penfield neighborhood.

But it also stands out because it is exempt from property taxes as the parsonage for a church nearly 12 miles away in an impoverished section of northeast Rochester.

Owned by New Born Fellowship Church, the parsonage is valued at $595,000 and is the residence of the church's husband-and-wife founders and pastors, the Rev. Warren and Perdita Meeks, who bought it in 2006 for $542,550 and deeded it to the church for $1 nine months later.

"That's a business move that I've seen a lot of pastors do to save money," Warren Meeks said in an interview. "It's an option available to clergy."

Gee, who'd have thought that churches and church leaders might use loopholes in the tax laws to shield property, salaries, and various expenses from government taxes? I've got to wonder if all that money would have been better spent by the church to improve the "impoverished" community surrounding it. One step would have been for Rev. Warren and Perdita Meeks to move into that impoverished community and minister to the people as neighbors rather than just as a religious authority from the pulpit.

But I suppose that's not as profitable or as comfortable, right?

September 24, 2009 at 12:46 pm
(1) Larian LeQuella says:

Say it ain’t so! You found hypocrisy in the way religious institutions operate? Colour me shocked!

September 25, 2009 at 3:49 pm
(2) chuckb says:

Nice sarcasm, now lets start taxing the bastards!

September 25, 2009 at 10:58 pm
(3) John Hanks says:

Everyone seems to ignore the billions that we give to Israel. It is an enormous religious subsidy.

September 28, 2009 at 3:32 pm
(4) AtheistGeophysicistBob says:

John Hanks (3). Please let this old atheist say “AMEN!!” to your comment.

September 30, 2009 at 3:55 pm
(5) mari B says:

for years i’ve known about this – to have the religious inst. pay taxes & legalize prostitution could solve the country’s financial problems

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