KINGSVILLE, Texas (ABP) — A small South Texas church could owe up to $10,000 in back taxes on two church-owned properties unless a county authority restores the facilities' tax-exempt status.
Kleburg County Tax Assessor Tina Flores removed the property tax exemption on two buildings owned by University Baptist Church in Kingsville — a house where the church's youth minister lived and a former nightclub the church was using for a variety of community outreach ministries.
The residence was used for youth Bible studies and as an editing studio for the church's tape and cable-broadcast ministry, as well as providing lodging for the student minister, said Jerry Tanner, pastor of University Baptist Church.
The other building was “a beer joint that went bankrupt and that had been donated to us to use for religious purposes,” Tanner explained. The church used it for community classes ranging from aerobics and martial arts to sculpture and archery.
New Hope Baptist Church, an African-American congregation, also has been meeting for Sunday worship at the multi-purpose facility for nearly two years, since its previous building was destroyed by a storm.
Tanner contested the denial of tax exemption by the tax appraisal district but said officials told him the residence was ineligible for tax exemption because the youth minister was a college student, not an ordained or licensed minister.
The multi-use facility was denied tax-exempt status because it was used for a Christian exercise program, and a tax exemption would give the not-for-profit aerobics program an unfair competitive advantage over other local, for-profit exercise facilities, he said.
“I'm an ex-pilot for the U.S. Air Force, not a lawyer,” Tanner said. “I have no legal background, but I can read. And I've read the property tax code and the laws that apply.”
The Texas tax code says a house is tax-exempt if it is “used exclusively as a residence for those individuals whose principal occupation is to serve in the clergy of the religious organization.”
The code also says real estate owned by a church is tax-exempt if it is “used primarily as a place of regular religious worship, and is reasonably necessary for engaging in religious worship.”
It stipulates that using the property “for occasional secular purposes other than religious worship does not result in loss of the exemption if the primary use of the property is for religious worship and all income from the other use is devoted exclusively to the maintenance and development of the property as a place of religious worship.”
Tanner maintained both facilities owned by University Baptist Church should have qualified for tax-exempt status, and he appealed the tax-exemption denial to the appraisal district's board.
One board member for the appraisal district called for the tax exemption on the two church-owned properties to be reinstated in December, but she was voted down three to one.
“We're looking at a $10,000 bill if we can't lick this,” Tanner said, noting that would be about 10 percent of the small church's annual budget.
Flores, the tax assessor, was reluctant to discuss the issue because the church still has the option of bringing legal action. She noted her office had been “going round and round” with the pastor about the issue for about three years, trying to give the church time to come into compliance with her understanding of the tax code.
But Flores confirmed the church-owned house was denied tax-exemption because the resident was not an ordained pastor.
“I'm a lay minister myself in the Catholic Church, so I know how important lay ministers are. The service they render is good, and the church wouldn't be able to go on without them. But they're not the pastor,” she said.
Flores contacted the State Comptroller's office to verify that the tax-exemption was limited to pastors and ordained clergy, she said.
Tanner disputed the charge that the church's youth minister was not clergy. “My understanding of the law is that if a congregation treats you as clergy, you are clergy. The person who was living in the house was hired under the clergy bylaw of our church,” he said.
Since the youth minister moved, the church has used the facility as a headquarters for its ministry to singles. Ironically, Flores noted that the facility would qualify for tax-exempt status now, if the church could present evidence that it is being used for that purpose. But that would not affect the back taxes owed for the time when it was a residence.
“There is a garage apartment in back and we already exempted that portion of the property because it's being used by the church for a clothing ministry for the poor,” she pointed out.
Concerning the multi-purpose facility, Flores maintained the building was used for non-church functions a majority of the time.
“We looked at the area and saw posters for jazzercize and karate classes,” she said. Flores commented it didn't look like a place of worship, and the church did not present clear evidence that it was being used for that purpose.
Tanner refuted the assertion the multi-purpose building was a commercial property, as well as the allegation he failed to provide evidence the facility was used for worship.
Participants in the Christian aerobics class paid only a nominal fee for utilities and upkeep of the facility, he said, and even that payment was inadequate to meet expenses.
Regarding the fact another congregation used the facility for worship once a week, Tanner said the appraisal district faulted the facility for not looking like a church building or posting a noticeable sign identifying the facility as a church.
“So we have a county board telling us how a church should advertise and what its facility should look like,” Tanner said.
C. L. Foley, pastor of New Hope Baptist Church, lives in Brownsville and said he cannot say for sure how the facility is used six days a week. But he has no question about its religious use on Sundays.
“It doesn't have to look like a church with a steeple and all that,” he said. “It's where we worship and fellowship. … Whenever we meet, it constitutes a church.”
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