Church Tax Battle Heads to Trial Tuesday

San Rafael, CA—Can cities tax church buildings, normally exempt from property tax, if they call it a “special tax”?  That’s the question that will be argued Tuesday in Marin County Superior Court.  Pacific Justice Institute (PJI), representing Valley Baptist Church in San Rafael, will take the church’s case to trial.

In 2010, San Rafael adopted the Paramedic Services Special Tax, which would allow the City to annually tax non-residential structures at a rate of up to 14 cents per square foot.  A few years later, the City sent a notice to Valley Baptist to declare that the church owed back taxes of over $13,000.  The church paid the entire amount under protest.  PJI seeks a refund of that money and for the Court to label this application of the tax as unconstitutional.  If the Court does not grant the church relief, Valley Baptist will pay thousands more in the coming years.

Under the state’s constitution, California, like all other states, exempts churches from all property tax, not just certain types of property tax.  By some estimates, clergy and religious institutions have received tax exemptions in one form or another for at least 3,500 years, going back to ancient Egypt.  In American tradition, property taxes are not extended to churches and many other non-profit entities in recognition that they alleviate burdens on the government through a wide array of significant and beneficial programs for children, the poor, and many other segments of the community.  The City has sought to get around this longstanding restriction by arguing that the “paramedic tax” is different from property tax.

Staff Attorney Ray Hacke has led PJI’s representation of Valley Baptist and will argue the case on Tuesday beginning at 9 a.m. “We’re asking the Court to call this violation what it is—an unconstitutional property tax,” states Hacke.  “Evidence shows that the City has no intention of collecting paramedic tax money from the public schools, which are protected by the same tax exemptions as churches under the California Constitution.  They are not only ignoring higher law, but picking and choosing who will and will not be subjected to an onerous tax.”

Brad Dacus, Founder and President of PJI, commented, “This case has implications far beyond San Rafael and the Bay Area.  If the City succeeds at evading the state constitution, other cities would be given the green light to ignore constitutional protections of churches in the future by playing a re-labeling game.”