At their Tuesday, September 5 meeting, Goochland supervisors thoughtfully revisited an ordinance deferred from August, which would require certain non-profit entities to file an application every three years to confirm tax exempt status on their real and personal property.
According to County Attorney Tara McGee, her office has been
working with the offices of the county assessor and Commissioner of the Revenue
and non-profit organizations, including churches, which would be affected by
the proposed ordinance, for some time. McGee said that neighboring jurisdictions
have had similar ordinances in place for years. She explained that while entities
may be exempt from federal and state tax, they may not necessarily be exempt
from local real estate and personal property taxation.
McGee compared the proposed process for tax exempt status authentication
to that needed to qualify for land use taxation. She said that several churches
in the county own vacant land, which, if not in use by the church, is taxable under
the law.
She contended that staff is not trying to “snap up money
from these vacant parcels” but rather collaborate with stakeholders to
determine if they want to sell the land, find a way to keep it tax exempt, or make
it subject to a reduced tax.
The goal of the ordinance is to shift the focus from who
owns a property to how it is being used to subsidize things being used for the
public good, but not for things that may not be.
Ken Peterson, District 5 said that if a church owns a dairy
farm on one side of its property and an apartment building on the other side,
currently all would be exempt from tax.
McGee said that the proposed ordinance would create a mechanism
to protect and defend tax exempt status.
County Assessor Mary Ann Davis said that currently, if the
owner of a vacant property is a tax-exempt entity, she treats that property as
tax exempt. If the ordinance is adopted, she would investigate to see if those
parcels could be developed or taxed. She contended that if the ordinance were
to be enacted and a church inherits a piece of property it would not find itself
with an unanticipated tax liability.
Vehicles must be titled in the name of the non-profit organization
to get the tax exemption.
During the August public hearing a representative of a local
church objected to the potential for the ordinance to allow government to use
the power of the purse to interfere with the free exercise of religion.
McGee said that in response to concerns about religious organizations,
a separate form was created for them to use that only requires publicly available
information.
Complexity of the compliance form was also a point of
contention as many non-profits rely on volunteers to fulfill their mission. The
initial eight-page form was whittled down to two pages. The supervisors asked
in August that a simple process to appeal denial of tax-exempt status be added.
Several speakers raised concerns about the new forms
contending that, if the form is not part of the ordinance, it could be changed
administratively with no oversight by elected officials.
The crux of the matter seems to be determining if revenue
derived from rental of property owned by tax exempt entities is exempt from
local real estate tax.
The Rev. Dr. Emanuel Harris, pastor of Jerusalem Baptist
Church in Manakin Sabot thanked McGee and other county officials for their
responsiveness to the concerns of organizations potentially affected by the
proposed ordinance. Coming out of Covid, Harris said, small rural churches are financed
by members, many on fixed incomes who tithe, and struggle to keep their doors
open with revenues from weddings and funerals. Sometimes people bequeath their
homes to their church. While the church decides what use to make of that home,
they could face a tax bill, and unanticipated financial burden.
Ben Slone of Maidens contended that constitutions of both
the United States and Virginia are very clear about the separation of church
and state. Therefore, churches should not be included among non-profits that
the Code of Virginia allows to be regulated.
Oher speakers questioned the need for the ordinance contending
that it would create more work for staff in pursuit of possible taxable income
on property owned by not-for-profit organizations and place an undue regulatory
burden on organizations that enrich our community.
McGee said that the county does not need to adopt an
ordinance requiring confirmation of tax-exempt status. Staff, the Assessor, and
Commissioner of the Revenue could simply have sent out a form to the 75 county
non-profits but, in the spirit of transparency, went the ordinance route and
did a great deal of outreach and many meetings, including a very productive one
with Rev. Harris that clarified how churches raise funds to keep the lights on.
Churches do not have to use their property every week for it to be exempt, she
said. Sites for Easter Sunrise Services or cemetery expansion would qualify.
“Staff is very interested in helping our non-profits figure
out what they can do to meet this standard,” said McGee.
Board Chair Neil Spoonhower District 2 said he initially
thought the proposed ordinance was a simple thing, but on deeper inspection,
realized the negative implications for churches.
“I saw the government attack churches. I saw ‘em keep liquor
stores and bars open but shut down our churches.” Spoonhower said the board has
to be very careful about placing onerous burdens on churches. He commended
staff for the progress it has made collaborating with citizens but could not
support an ordinance that did not include the form to document compliance.
Rather than vote to adopt the ordinance with a delayed effective
date, the Board voted 4-1 with Spoonhower in dissent, to defer the matter until
its March 2024 meeting. This will give staff time after the busy season for the
Assessor and Commissioner of the Revenue to fine tune the proposed ordinance and
hold further discussions with stakeholders.
Go to the county website https://www.goochlandva.us/ and click on
“watch county meetings” to hear the entire discussion.
No comments:
Post a Comment