TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, January 31, 2006

Tax-Exemption for Church Parking Lots

Howard Bashman has a round-up of newspaper articles about a recent split Pennsylvania Supreme Court decision, Wesley United Methodist Church v. Dauphin County Board of Assessment Appeals, No. 105-MAP-2004 (Pa. 12/30/05), permitting a church to treat its parking lot as tax-exempt property for local property tax purposes:

Appellant contends this Court’s decision in Second Church of Christ Scientist of Philadelphia v. City of Philadelphia, 157 A.2d 54 (Pa. 1959), is controlling and directly on point. In Second Church, two churches sought real estate tax exemptions for parking lots located on land contiguous to their buildings. This Court held church parking lots are not exempt from taxation as they are not “actual places” of religious worship and are not “necessary” for occupancy and enjoyment.

Times have changed since Second Church was decided in 1959. In this day and age, parking lots may be a necessity for a church, rather than just a convenience. People and churches have both moved away from towns, and many people are no longer living within walking distance of their church. To attend, they are required to drive and park a vehicle. With no available parking, church-goers may be forced to seek religious expression elsewhere, causing a decrease in membership and impeding the ability of the church to exist.

Section 204(a)(1) of the Assessment Law allows for tax exemption of ground adjacent to the church building which is necessary to permit actual worship. Just as appellant has granted tax exemptions to churches required by zoning ordinances to provide parking, the Church has established its parking lot is entitled to an exemption because it is “necessary for the occupancy and enjoyment of [Wesley].” Testimony established the parking lot was reasonably necessary and the Church could not exist without it. Based on this testimony, the granting of the tax exemption for the two parcels was in compliance with both the Constitution and the Assessment Law as being necessary. We hasten to point out that we do not hold all church parking lots are entitled to taxexempt status. However, if a church proves its parking lots are a reasonable necessity to the existence of the church itself, those lots are entitled to such status.

Chief Justice Cappy filed a blistering dissent, concluding:

[In Second Church,] we articulated the parameters that the Constitution required for the tax exempting statute, stating: ”The status of an actual place of worship has not been extended beyond ingress and egress, and light and air. We see no reason or, permission, because of the constitutional provision to extend it farther.” Accordingly, we concluded that parking is an adjunctive use of property that is not part of actual worship, and held that the churches were not entitled to the tax exemption they sought.

[O]n one point, the majority is correct -- “Times have changed since Second Church was decided in 1959.” The Pennsylvania Constitution in relevant part, however, has not. Therefore, Second Church remains the law and is controlling. Simply put, under its teaching, a tax exemption to the Church for its parking lot is violative of Article VIII, Section 2(a)(i) of the Pennsylvania Constitution and Section 204 of the General County Assessment Law.

For press reports, see:

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