By M.H. Cavanaugh
Christian Action League
July 23, 2015
RALEIGH – In March of this year, the Christian Action League reported on the way some county tax assessors were using a loophole in current state statutes to stick it to some churches.
Neal Jackson, pastor of Beulah Baptist Church, in Bennet, North Carolina, and his congregation were shocked when they learned the Randolph County Tax Department was taxing their church for the new sanctuary it was building. Despite the fact that North Carolina law exempts churches from property taxes if their building and property are being used “wholly and exclusively for religious purposes,” the county tax department determined since the edifice was still under construction and unoccupied, it was not covered under the law and should be taxed.
Jackson and the good folks at Beulah Baptist appealed their tax bill of more than $7,000 to the Randolph County Board of Equalization and Review and the Board reversed the decision.
But the congregation at Vienna Baptist Church in Pfafftown of Forsyth County was not so fortunate.
Jeff Clawson, pastor of Vienna Baptist, said that his church was erecting a new building on a piece of land that was owned by the church near the place where his church was already meeting. The land, he said, was not tax exempt because they didn’t meet on it. Nevertheless, they were still in the process of constructing their new building on that property. “After the building was completed and the occupancy permit received, which was in late March of 2012, we were notified that we would have to pay taxes on the church building because the building was not occupied as of January 1, 2012,” said Clawson.
Clawson added that his church appealed the decision of its county tax assessors to the Forsyth County Board of Equalization and Review and lost. So they appealed to the North Carolina Property Tax Commission, but lost there as well. Clawson said that in taxes and attorney’s fees his church was stuck with a bill of over $13,000.
Enter Rep. Allen McNeill (R-Randolph), who filed HB 229-Modify Religious Property Exemption. McNeill’s legislation closes the loophole in the law exploited by county tax assessors and clarifies what most people assume has always been the real intent of the tax law. It specifically exempts buildings and land occupied by the structure from local property taxes if the building is “intended to be wholly and exclusively used by its owner for religious purposes upon completion.” The tax exemption for incomplete religious buildings ends after 90 days from the date of the issuance of a certificate of occupancy or 180 days after the end of construction.
The measure, which passed the House unanimously 114-0 on March 26th, was taken up by the Senate this week. The Senate Finance Committee approved a Proposed Committee Substitute (PCS) of the bill on Tuesday that did nothing to change the language regarding churches and taxes, but did add a provision that authorizes a judge to allow a person with a revoked driver’s license to drive to attend a church worship service. This also required changing the title of the bill to HB 229-Church Tax Exemption/Driving Privileges.
Current law in North Carolina authorizes a judge to allow a person with a revoked driver’s license to drive for six listed purposes under a limited driving privilege: (1) employment, (2) maintenance of household, (3) education, (4) court ordered treatment or assessment, (5) community service ordered as a condition of probation, and (6) emergency medical care.
The latest version of HB 229 adds a 7th allowance – (7) to attend a religious worship.
Upon hearing the decision of the full Senate to unanimously approve HB 229, 47-0, on Wednesday, Rep. McNeill said he was both “proud and happy.”
“It will now come back to the House for concurrence,” said McNeill. “I knew from the first time I heard that a few tax departments were taxing church buildings under construction that I had to do something about it.”
McNeill also expressed his appreciation for the Christian Action League’s “advocacy and help.”
He added, “I want to thank the bill cosponsors and other legislators that gave me encouragement and advice during the drafting and passing of this important piece of legislation…We must all remain vigilant to protect our religious freedoms, including the tax exempt status of churches.”
Pastor Neal Jackson said he was grateful for the Christian Action League’s “tireless efforts in supporting our churches by informing us of the many political issues taking place in our state as well as efforts to work on our behalf when the laws are not protecting our religious freedoms.”
Pastor Jeff Clawson stated, “It’s a blessing to know that our state government has passed this law to help ensure that the intent of the tax law will not be used against the churches of North Carolina. The thought that our state government is working to protect our North Carolina churches is comforting during the current national climate in regard to religious liberty.”
Dr. Mark Creech, executive director of the Christian Action League, said he couldn’t see any reason why the Senate’s version of the bill would have any difficulty gaining concurrence from the House.
“Although I say it with some restraint, just because in the political process you never know what’s going to happen, but it appears to be a done deal at this point. And for this I rejoice,” said Dr. Creech.