January 23, 2019
* See Endnote for Indiana Tax Code for Religious Property Tax Exemption
Trinity Springs Baptist Church had executed a Declaration of Trust in accordance with the First Amendment to the United States Constitution and corresponding Indiana Constitutional provisions. The county tax board had honored the tax exemption on the real property held in the trust estate for some years. However, in 2013 the local property tax board denied the exemption.
The issues in the case were:
- whether the the church had to be incorporated and obtain Internal Revenue Code § 501(c)(3) status in order to qualify for the property tax exemption;
- whether a church which files a letter of notification stating the that the sole purpose of the property was for worship and explaining that filing an exemption application was against the Church’s religious precepts instead of the state application for property tax exemption is disqualified from receiving the property tax exemption.
Martin Jones, Pastor of Trinity Springs Baptist Church requested an administrative hearing in accordance with Indiana law to contest the denial. That hearing was video recorded. The video is linked to in the following online article: Trinity Springs Baptist Church Wins Tax Case. The two witnesses for Trinity Springs at the hearing were Pastor Jones and Greg Dixon, Pastor of Indianapolis Baptist Temple. Pastor Dixon testified as to a property tax exemption issue involved with IBT which had been unincorporated and organized using the Declaration of Trust since the 1980s. Pastor Jones’ testimony is very instructive. The state offered testimony and argument at the hearing. The facts and issues were well explained by Pastor Jones at the hearing. Pastor Jones’ Defense is a transcript of the defense testimony given by Pastor Jones at the hearing.
Pastor Jones entered the following exhibits into the record at the hearing before the local tax board:
- Petitioner Exhibit A – Trinity Springs Baptist Church Congregational Resolution,
- Petitioner Exhibit B – The Trail of Blood, J.M. Carroll,
- Petitioner Exhibit C – Trinity Springs Baptist Church Letter of Notification to Assessor, 2006
- Petitioner Exhibit D – Trinity Springs Baptist Church Letter of Notification to Assessor, 2013
- Petitioner Exhibit E – 1989 Memorandum from State Board of Tax Commissioners to County Auditors regarding exemption of religious property,
- Petitioner Exhibit F – Biblical and Historical Baptist Position –Separation of Church and State (click to go to PDF of that Exhibit), and
- Petitioner Exhibit G – 2007 pay 2008 tax statement.
The local tax board denied the property tax exemption after the hearing. Pastor Jones appealed to the Indiana Board of Tax Review who held for Pastor Jones in all matters. Go to the PDF of the Final Determination of the Board of Tax Review by clicking the following: FINAL DETERMINATION OF THE INDIANA BOARD OF TAX REVIEW. That determination lays out the facts, procedural history, issues, and analysis of the case.
The Indiana property tax exemption hearing process is much more friendly to those who wish to contest property tax matters than that of some states. Minnesota, for example, has no agency hearing process and property tax payers must petition the Minnesota Tax Court in their attempts to obtain relief, a much more cumbersome and time consuming process. It can take years for the Minnesota Tax Court to get to a case and the rules of civil procedure involved are much more cumbersome than those of the Indiana agency approach. So much so that it would be very difficult for one such as Pastor Jones to deal with the case pro se in Minnesota and some other states. Of course, had Pastor Jones lost in the agency process he could have appealed to state court.
Sec. 21. (a) The following tangible property is exempt from property taxation if it is owned by, or held in trust for the use of, a church or religious society:
(1) A building that is used for religious worship.
(2) The pews and furniture contained within a building that is used for religious worship.
(3) The tract of land upon which a building that is used for religious worship is situated.
(b) The following tangible property is exempt from property taxation if it is owned by, or held in trust for the use of, a church or religious society:
(1) A building that is used as a parsonage.
(2) The tract of land, not exceeding fifteen (15) acres, upon which a building that is used as a parsonage is situated.
(c) To obtain an exemption for parsonages, a church or religious society must provide the county assessor with an affidavit at the time the church or religious society applies for the exemptions. The affidavit must state that:
(1) all parsonages are being used to house one (1) of the church’s or religious society’s rabbis, priests, preachers, ministers, or pastors; and
(2) none of the parsonages are being used to make a profit.
The affidavit shall be signed under oath by the church’s or religious society’s head rabbi, priest, preacher, minister, or pastor.
(d) Property referred to in this section shall be assessed to the extent required under IC 6-1.1-11-9.
[Pre-1975 Property Tax Recodification Citation: 6-1-1-2(6).]
Formerly: Acts 1975, P.L.47, SEC.1. As amended by Acts 1981, P.L.68, SEC.1; P.L.74-1987, SEC.5; P.L.198-2001, SEC.30; P.L.264-2003, SEC.2.