TAXATION – Religious institution exemption: John Bradford Freeman, Jessamine Co. PVA, et al. v. St. Andrew Orthodox Church, Inc. (SC 5/21/2009

John Bradford Freeman, Jessamine Co. PVA, et al. v. St. Andrew Orthodox Church, Inc.
2007-SC-000640-DG May 21, 2009

Opinion by Justice Cunningham. All sitting; all concur.

St. Andrew Orthodox Church, Inc. appealed a property tax assessment, claiming it violated the exemption on real property “owned and occupied” by religious institutions found in Section 170 of the state constitution. The 10-acre property included two single family homes that the church rented to tenants until such time as it could afford to build a new church on the land. In addition to the rental dwellings, parts of the property were used for church activities such as picnics, recreation, prayer and meditation. The circuit court upheld the assessment, but ruled that it must be apportioned—with the parts occupied by the renters taxed and the parts used by the church exempt. The Court of Appeals reversed, holding the entire property exempt under Section 170. In reaching its decision the Court of Appeals relied on an Attorney General’s opinion stating that the requirement that the church “occupy” the property did not require use for religious purposes, and that plans for future occupation were sufficient for the exemption. The Supreme Court reinstated the circuit court’s decision that the assessment be apportioned, noting that the advisory AG opinion would extend the exemption to church-owned shopping centers, commercial enterprises and land speculation.

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