Church Administrative Offices Denied the Real Property Tax Exemption

Churches and other places of worship have had two available  exemptions from Ohio real property taxes, but this may be changing. Property where public worship actually occurs is specifically exempt. However, since this public worship exemption does not encompass buildings used by churches for ancillary purposes, such as administrative offices, churches have historically been granted exemption for such buildings based upon a separate exemption for property used primarily for “charitable purposes.”

The property at issue in Church of God in Northern Ohio, Inc. v. Levin was the regional administrative office for the church, containing offices, conference rooms and classrooms used for church leadership meetings and ministerial teaching and training. The taxpayer in this case argued that through its support of public worship the property was being used for charitable purposes. Shockingly, the Ohio Supreme Court, contrary to previous decisions, found that “while public worship often encourages its participants to engage in other distinctly charitable activates as part of the spiritual benefit that it confers, that does not establish that the worship service itself constitutes charitable activity.” Accordingly, the Court limited the exemption for property used primarily for charitable purposes to exclude all of the property at issue, which it found was “merely supportive of public worship.”

This decision puts into question whether ancillary buildings operated by churches and other places of worship, such as social halls and offices where actual worship does not occur, are entitled to an exemption from Ohio real property taxes. It remains to be seen whether this decision is limited to separate, free-standing buildings (although there is no language in the decision to support such a distinction).  Click here to obtain a full copy of the opinion in  Church of God in Northern Ohio, Inc. v. Levin, 2009 Ohio 5939 (Nov. 18, 2009).