The Church Exemption may be claimed on property that is owned, leased, or rented by a religious organization and used exclusively for religious worship services (see section 3(f) and section 5 of article XIII of the California Constitution and Revenue and Taxation Code section 206). The Church Exemption is the most restrictive of the three exemptions available to a church since the organization's property must be used solely for religious worship and other activities reasonably necessary for the accomplishment of the church's religious purposes.
For leased property, any reduction in property taxes on leased property used exclusively for religious worship, and granted the Church Exemption, must benefit the church or religious organization entitled to the exemption (see Revenue and Taxation Code section 206.2). If a church owns and uses property, and also allows another church to use that property, both churches must file Church Exemption claim forms.
In the case of leased property:
- The church or religious organization leasing the property (lessee) may file a Church Exemption Claim form (BOE-262-AH); or
- The owner/lessor may file a Lessor's Exemption Claim form (BOE-263). The user/lessee church must complete the affidavit stating that the user/lessee church uses the property only for religious worship.
Real Property – Parking Area
Pursuant to the authority of subdivision (d) of section 4 of article XIII of the California Constitution, all real property that is necessarily and reasonably required for the parking of automobiles of persons who are attending religious services, or are engaged in religious services or worship or any religious activity, is exempt from taxation (see Revenue and Taxation Code section 206.1).
Both the Church Exemption form and the Lessors' Exemption Claim form are available from the assessor of the county where the property is located. Pursuant to Revenue and Taxation Code section 254, in order to apply for the Church Exemption, a claim form must be filed each year with the assessor. To receive the full exemption for property owned or leased on the January 1 lien date, the claim must be filed by February 15 (see Revenue and Taxation Code section 255).
Late Exemption Claims
If a person claiming the exemption fails to file the claim form by 5 p.m. on February 15 of the fiscal year for which the exemption is claimed, but files the form on or before the January 1 lien date in the next calendar year, the assessment will be reduced by an amount equal to 90 percent of the reduction that would have been allowed had the claim form been timely filed; or the assessment will be reduced by an amount equal to 80 percent of the reduction that would have been allowed, had the claim form been timely filed the following calendar year (see Revenue and Taxation Code section 270).
Properties Acquired After the Lien Date
Revenue and Taxation Code section 271 allows the cancellation or refund of any tax, penalty, or interest imposed on properties acquired after the lien date, or organizations not existing on the lien date, as long as the following conditions have been satisfied:
- The exemption claim is filed within 90 days from the first day of the month following the month in which the property was acquired, or by February 15 of the following calendar year, whichever occurs earlier.
- The cancellation or refund will not exceed the number of days for which the property was qualified during the fiscal year.
- If an organization claiming the exemption for properties acquired after the January 1 lien date, or for organizations not existing on the lien date, fails to file the claim form within the time required by the applicable provision, the assessment will be reduced by eighty-five percent of any tax, penalty, or interest imposed upon the property.
- The total assessment exceeds $250.
Letters To Assessors (LTAs) provide an ongoing advisory service for county assessors and others interested in the property tax system in California. The letters present Board staff's interpretation of rules, laws, and court decisions on property tax assessment. The following LTAs pertain to assessment or procedural issues involving exemptions for churches.
|Letter to Assessor||Date||Title|
|2008/054||09/16/2008||Cell Towers on Property of Religious Organizations|
|2012/026||07/02/2012||Termination of Exemption Upon Sale or Transfer|
Annotated legal opinions are summaries of the conclusions reached in selected legal rulings of California State Board of Equalization counsel. The following legal opinions pertain to questions involving exemptions for churches:
|Annotated Legal Opinion||Date||Title|
|230.0001||04/12/1978||Church Exemption, Boats|
|230.0005||01/25/1980||Church Exemption, Cafeteria|
|230.0020||10/22/1981||Church Exemption, Church Uses|
|230.0021||01/17/1985||Church Exemption, Church Uses|
|230.0022||09/11/1989||Church Exemption, Church Uses|
|230.0025||10/10/1991||Church Exemption, Late Filing Forgiveness|
|230.0026||07/30/2004||Church Exemption, Lease Land|
|230.0030||10/22/1981||Church Exemption, Non-Church Uses|
|230.0031||04/28/1982||Church Exemption, Non-Church Uses|
|230.0032||10/06/1980||Church Exemption, Non-Church Uses|
|230.0040||10/17/1980||Church Exemption, Special Taxes|