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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