County
Ada Seeks Taxes On Church Rental Property
September 30, 2011 
Anna Webb over at the Daily Paper had a good page one story Friday about Ada County seeking property taxes on the First Presbyterian Church space being used to generate rental income.
The issue has apparently slipped by those who make the decisions about tax exemptions. The Statesman notes that “by law and tradition,” the church has been exempt from paying taxes. Perhaps, but probably not. Eight years ago when the GUARDIAN brought it to the attention of the county assessor that no taxes were being levied on some Boise fire stations that were being rented from U.S. Bank, they were quickly put on the tax rolls.
Even though the Boise YMCA is the tenant and uses the church space for a non-profit day care, the county probably has a good case in favor of taxing the church. The gut issue is the 18% of the church space being used for the day care generates rental income for the church and is not exclusively related to the church’s religious activity.
Just like the case of the City renting fire stations owned by the bank, the tenant’s status and use of the rental space is of no concern when it comes to establishing a tax exemption. In short, the Idaho Board of Tax Appeals doesn’t have much reason to rule in favor of the church on the appeal currently under consideration. The cause is noble and the benefit to the community poor cannot be denied. However, if the same space were owned by “ACE Property”, they would have to pay taxes despite the good works and intentions of the Y.
If the church were to run the day care as part of its own religious activities or even as a non-profit community service it would remain tax exempt, but when they become landlords, the congregation subjects itself to taxes.
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Comments & Discussion
Comments are closed for this post.
Oct 1, 2011, 11:18 am
You could carry the same logic to the State Land Board ownership of the Storage business they recently purchased. It is not used for a public purpose and should therefore be taxed just like any other business and property.
Even Urban Renewal agencies have to pay property taxes on property they own not used for a public purpose.
Oct 4, 2011, 3:42 pm
How about the first amendment? Does it apply? There is no way under the first amendment that a religion can be taxed unless it be acting in commerce. Owning property and receiving currency for its use is not a commercial activity. Any tax would be a law prohibiting the free exercise of the religion. Won’t work.
EDITOR NOTE–Sorry Fred. The whole issue is about USE and the church itself acknowledges the 18% space is not used for religious activities. As we said earlier, if the church operated the day care there would be no issue.
Oct 17, 2011, 11:00 am
Perhaps the church should look into operating it’s own daycare.
EDITOR NOTE–We have made the same observation in the past. If a private party leased space to the YMCA for day care, they would have to pay taxes. The solution is for the church to operate the day care as part of its service to the community, but they probably don’t want the liability. If they are bringing income outside their religious mission, it is subject to tax.