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Court of Appeal:
Church Not Exempt From Property-Related Special Tax
By a MetNews Staff Writer
A church, which is exempt from property taxes under the California Constitution, is not spared liability for payment of special taxes imposed on property owners for services, Div. One of the First District Court of Appeal declared yesterday.
The opinion interprets the state constitutional provision that says that properties “exempt from property taxation” include “[b]uildings, land on which they are situated, and equipment used exclusively for religious worship.”
Justice Gabriel P. Sanchez wrote:
“This appeal presents a novel question of constitutional interpretation: whether the religious exemption authorized by article XIII, section 3(f) extends to non ad valorem special property taxes such as the Paramedic Tax. We conclude that it does not, and therefore reverse the trial court’s judgment.”
Trial Court’s Holding
Marin Superior Court Judge Stephen P. Freccero had held that the City of San Rafael’s Paramedic Services Special Tax, approved by a two-thirds vote of the electorate, could not be applied to the plaintiff, Valley Baptist Church. He held:
“A special tax ‘assessed by any agency upon any parcel of property or upon any person as an incident of property ownership’…, such as the Paramedic Tax, falls within the plain meaning of ‘property taxation’ ” for purposes of the article XIII exemptions.”
Explaining the reversal, Sanchez noted that Art. XIII—adopted by voters on Nov. 5, 1974 as Proposition 8—does not mention a “special property tax” and for good reason: such taxes did not come into existence until the passage of Proposition 13 on June 6, 1978.
Four Principles
The jurist reviewed cases dealing with taxation of property, and gleaned these precepts:
“First, constitutional exemptions to property taxation applied only to direct property taxes and not to other forms of taxation such as an excise or use tax. Second, since the first state constitution of 1849, the only form of ‘property taxation’ was the ad valorem property tax. a general tax levied in proportion to the assessed value of property. Third, although certain exactions may be property-related, such as a special assessment for flood control improvement, long-standing precedent established that these exactions were not ‘property taxes’ subject to exemption by religious or nonprofit organizations. Finally, exemptions from property taxation must be strictly construed against the right to the benefit, and any intent to extend the tax exemption must be conveyed in ‘unmistakably clear language.’ ”
He wrote:
“Proposition 8 was not intended to make significant substantive alterations to California’s property tax structure, and more specifically, the religious exemption remained largely unchanged from its pre-1974 incarnations….
“[I]t seems clear that the religious exemption from ‘property taxation’ as adopted in 1974 was intended to apply solely to general ad valorem property taxes.”
No Indication
Sanchez went on to say:
“In short, there is nothing in article XIII—either in the text of the article itself or in ballot materials adopting or revising its provisions—that indicates the religious exemption under section 3(f) was intended to cover special property taxes.”
Ballot materials in connection with Proposition 13, creating special taxes, he noted, differentiated them from ad valorem property taxes.
The plaintiff belatedly—and too late—raised a challenge to the tax based on the First Amendment’s free-exercise clause, Sanchez said, declining to address the contention.
The case is Valley Baptist Church v. City of San Rafael, 2021 S.O.S. 903.
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