Does Your Church Qualify for Property Tax Exemption?
Since the founding of our country and the introduction of official federal income tax laws, churches, mosques and synagogues continue to be tax-exempt. Many believe government’s protective role regarding religious institutions must remain intact, given their innumerable benefits to society.
Included in the various tax benefits provided all religious institutions, churches also qualify for property tax exemption. According to the IRS (https://www.irs.gov/pub/irs-pdf/p1828.pdf): “… a maximum of five acres is eligible for property tax exemption for property owned by a nonprofit-recognized religious denomination used exclusively for religious worship and related church purposes.”
For your church to qualify, an IRS application must be completed within 60 days of either acquiring the property or converting the property to one used for a place of worship. If you fail to apply within the deadline, retroactive exemptions are accepted if the application is filed within three years of the date the taxes were due, however the IRS may hit you with a late filing fee.
Even with all the talk of tax reform, the question of whether we should impose property tax on churches remains a hands-off issue. Keep in mind, however, guidelines must be met to qualify for eligibility, including:
- Distinct legal existence
- Formal code of doctrine and discipline
- Distinct religious history
- Organization of ordained ministers
- Literature of its own
- Regular religious services
- Established place of worship
- Sunday school for religion instruction of the young
Generally, the IRS considers all circumstances in assessing an organization’s qualifications for tax exempt status, but in general it’s safe to say religious entities are not responsible to pay property tax.
Considering the essential societal benefits offered by churches, mosques and synagogues, our government continues to grant special status to houses of worship. Churches offer a gentle influence on individuals, their congregations and society as a whole, serving our communities free from government taxation.
Online Stewardship Accounting & Consulting Services offers a complete range of accounting, tax, and financial support services. Contact us at Lynn@OnlineStewardship.com or 904 398-4747.
