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Two Courts Are Reviewing Revocation of Property Tax Exemptions

By Howard Friedman

Two different courts last week focused on when an organization meets the standards for a property tax exemption as a religious or charitable non-profit institution. In Urbana, Illinois, a county court ruled that Provena Covenant Medical Center's lawsuit seeking an immediate property tax refund should be permitted to continue. After the state ruled that the property tax exemption for the Catholic hospital should be revoked, the hospital sued. A Sangamon County court ruled the hospital qualifies for the exemption as both a religious and charitable organization. The Department of Revenue is appealing that ruling and claims that it is not required to refund past taxes to the hospital until appeals have been exhausted. Covenant sued for an immediate refund. The Urbana News-Gazette reported last Thursday that in holding that this suit could continue, the court urged the state to give "serious thought" to making the refund and to stop spending taxpayer money on litigation.

Meanwhile, Friday's Roanoke (VA) Times reported that the Virginia Supreme Court has agreed to hear an appeal by The Glebe, a Baptist retirement facility, that is attempting to overturn the revocation of its property tax exemption. Last year a state circuit court ruled that the religious and benevolent exemption granted in 1976 by the Virginia legislature to Virginia Baptist Homes applies to land held in the name of VBH only if the specific property is used for religious or benevolent purposes. (See prior posting.) The county contends that The Glebe is a resort for wealthy retirees that provides no charitable or religious services to its residents. VBS says that eventually the facility will offer reduced rates.

Full post as published by Religion Clause on March 03, 2008 (boomark / email).