Church Law and Tax 1995-11-01 Recent Developments

Taxation-Church Property

Richard R. Hammar, J.D., LL.M., CPA

• Key point: Vacant land may be exempt from property taxation if it is used at least occasionally for religious purposes, and is put to no other use.

• In a significant ruling, a Florida court ruled that vacant land owned by a religious agency and used occasionally for religious purposes was exempt from property taxation. The Florida Conference Association of Seventh Day Adventists (the “church”) purchased 2.5 acres of vacant land in 1989. After purchasing the land, the church used it occasionally for religious purposes. This use included prayer services on the property by small groups of church leaders and frequent visits to the property for site development planning and fundraising. A tax assessor ruled that the “inaccessible, weed-covered lot” was not exempt, and that the religious activities that occurred on the property were incidental. State law exempts from tax any property that is used exclusively for religious purposes. A state appeals court disagreed with the assessor’s decision, and ruled that the property was exempt from tax. It referred to an earlier Florida case in which a court ruled that vacant land owned by a Baptist church was exempt from tax because it occasionally was used for religious purposes and was not used for any nonexempt purpose. Hausman v. First Baptist Church, 513 So.2d 767 (Fla. App. 1985). The court referred to another case in which a Florida court ruled that vacant land owned by a school and occasionally used for educational purposes was exempt. Trinity Episcopal School v. Robbins, 605 So.2d 880 (Fla. App. 1992). The court in the Trinity Episcopal School case observed: “[We are] not persuaded that the [minimal] amount of time that the school used the property bars the exemption when, as here, the property is used exclusively for educational purposes and not put to any other use …. The property was not put to any other use which renders the educational purpose use incidental.” The court concluded that these cases supported its conclusion that the vacant lot owned by the church was exempt from tax: “[T]he record demonstrates that the church’s property was used exclusively for religious purposes. There is no evidence that the property was used for any nonexempt purpose. Thus, the church’s use of the property cannot be characterized as incidental.” This is an ingenious argument. Florida, like most states, exempts property that is used exclusively for religious purposes. A corollary to this rule is that property is not exempt if the religious use is merely “incidental.” However, if the only activities that occur on vacant land are religious, then this becomes the exclusive use even though the religious activities are sporadic or occasional. This is an argument that can be used by any church or religious organization with vacant land that is occasionally used for religious purposes (and no other purposes). Robbins v. Florida Conference Association of Seventh Day Adventists, 641 So.2d 893 (Fla. App. 3 Dist. 1994).