Valley Baptist Church in San Rafael, California, was slapped with a $13,000 bill for unpaid taxes that, by law, it should never have been asked to pay.
When the Pacific Justice Institute, a group that defends religious freedom, realized the tax was a clear violation of state law, it filed a lawsuit on behalf of the church to recover the money.
Here’s what happened….
The city of San Rafael enacted a Paramedic Services Special Tax that allows it to tax non-residential structures at 14 cents per square foot, up from 12 cents a square foot.
In researching the issue, PJI discovered that under California law, all taxes on real property must be ad valorem taxes – in other words, they must be levied in proportion to the property’s value as determined by assessment or appraisal.
More importantly, the California Constitution EXEMPTS real property used for religious purposes from ad valorem taxation.
In essence, the church should have never been hit with the extra tax.
“The Special Tax is a de facto property tax because it triggers a duty on the part of owners of non-residential structures to pay the tax,” explained PJI President Brad Dacus. “The California Constitution exempts churches from paying such taxes, pure and simple.”
Churches provide significant and beneficial social services to their communities. That is why federal, state and local governments have long granted tax exemptions to them.
“People in government unfortunately assume that churches aren’t paying their ‘fair share’ without understanding why they are tax exempt in the first place,” said Dacus.
Watch this powerful 1-minute video of PJI’s Brad Dacus explaining this unlawful tax.
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