CHURCH PROPERTY TAX EXEMPTION DISPUTES

In the annals of church litigation, exemption from taxation is not usually controversial.  If the “entity” can possibly, rather than merely plausibly, be considered a “church,” its exemption from taxation is generally assumed.

In Jaswant Sawhney Irrevocable Trust, Inc. v District of Columbia, Slip Op. (DC App. 2020), the Plaintiff was denied a property tax exemption because it was allegedly not “a single congregation” owning and using the building.  The Plaintiff, however, was a non-profit corporation that operated the property as a Gurdwara, a place of assembly and worship.  The Plaintiff also had other charitable functions besides operating the Gurdwara so the taxing authority held it was not a church.  Ultimately, the appellate court reversed the trial court’s agreement with the taxing authority so that on remand the Plaintiff could put on proof at trial that the property was operated as a Gurdwara.  The appellate court held there did not need to be an exact legal identity shared by the church owner and the congregants to qualify for the exemption.  Also, the statutory use of the word “congregation” did not necessarily require a definition by “legal form, nor indeed by any legal formality.”

Church conferences and denominations may own church property in which meets an assembly of worshippers that may or may not be owners of the property owning entity.  Tax exemption should still be available so that the taxing authority can refrain from ecclesiastical entanglement trying to determine whether the worshippers and the owning entity are “sufficiently” related.  The real challenge in a tax exemption case may be simply to refrain from underestimating their complexity.  In the case reported, the actual application for tax exemption submitted to the taxing authority was not put in the court record.  Even though statutes may use the word “appeal” permitting a challenge to governmental administrative actions, it is not generally automatic that the record before the governmental agency would become part of the record before the court.  An incomplete record is often an anathema to an appeal of any sort.

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