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Church Claims It Was Misled Into Not Applying For Tax Exemption

By Howard M. Friedman

Knox News yesterday reported that a church in Knoxville, Tennessee is making an unusual argument in an attempt to avoid $53,000 in back taxes that it did not realize it owed. Tennessee law gives a church three years to apply for a property tax exemption when it replaces its previously exempt property with new property. New Covenant Baptist Church bought new property and began to occupy it as a church in 2005. It thought its previous property was exempt since it never received a tax bill. However in fact the county wrongly omitted its previous property from the tax rolls because the church had never properly applied for an exemption. In In re New Covenant Baptist Church, Inc., (TN Bd. Equal., Feb. 26, 2010), the Tennessee Board of Equalization concluded that the church was not entitled to the grace period for its new property because its previous property was not in fact exempt. In a letter to the Knox County Commission and a draft legal complaint, the church argues that the fault lies with the Knox County Tax Assessor who misled the Church into assuming that its prior property was exempt. The church obtained an exemption beginning Nov. 2006, but its taxes for the two prior years remain at issue.

Full post as published by Religion Clause on March 21, 2010 (boomark / email).