Generally, the “parsonage” is an obsolete tool of compensation because most ministers with families came to understand in the 20th century that home ownership was the largest and best investment working people could make. Parsonages were useful to some churches with high ministerial turnover and as an in-kind compensation tool. Nevertheless, some churches still use parsonages for a variety of good reasons.
In West Michigan Annual Conference of the United Methodist Church v City of Grand Rapids, Slip Op. (Mich. App. 2021), the city was so desperate for revenue it decided to deny parsonage status, and therefor exemption from ad valorem taxes, to the parsonage inhabited by the District Superintendent over 91 churches. The assessed value was under $100,000. The city argued the District Superintendent was an ordained minister but did not supervise a particular church making the parsonage ineligible. The Court of Appeals affirmed the appeals board of the city in holding that the statute did not require that the minister be “over a particular church” and contained no such qualifying language.
Churches faced with a rogue local government attempting to impose taxation without justification or legal basis should not challenge the taxation without counsel. A lawyer with a little experience with the local government in question can save a church a lot of money and consternation. It is very rare that such questions arise and are litigated to this extent. But, sometimes, even stupid lawsuits take on a life of their own and are impervious to common sense.