May 31, 2010; Source: Boston Globe | When is a tax exempt property no longer tax exempt? When it is not being used, according to some municipal government authorities in Massachusetts. Nine municipalities have levied taxes on the Roman Catholic Archdiocese of Boston for churches, schools, convents, and parish halls that are no longer used for religious purposes. Actually, they’re shuttered.

Tax assessors say that the lack of use, or in some cases, sanctioned religious use, means that the buildings are now taxable. Property is tax exempt by virtue of its tax exempt use, not simply because it is owned by a public charity or religious organization. The municipalities appear to be winning some of the arguments, as the Church has backed down and paid up for some of the closed churches.

In these times, no one should be surprised that assessors are looking at highly valued church properties that might be brought back on the tax rolls. For the Archdiocese, which is struggling to right its books after paying for costs incurred in its sexual abuse scandals, these are funds that it would dearly like to keep away from municipal coffers. A church spokesperson makes the ownership argument: “Our church properties are tax-exempt because we are a religious organization, and all properties owned by the archdiocese are tax-exempt,” but the law seems to favor the government who can give church properties a tax exemption only if they are being actively used for religious purposes.

In some municipalities, the question is how “active” does “actively” have to be. In one community, an almost-empty convent that still houses a handful of elderly nuns is being targeted for taxes but the church says that it is still used. The assessors are watching the properties closely, as this assessor from Lowell notes: “I’m very careful about it. I literally drive by to see if there is anything going on, but I also talk to the people in that area. Plus I send my guys through, to be on safe side.’’

If the church were intending to revive religious activities in these properties, it could call their current lack of use a temporary interruption and demonstrate a clear intent to fix and re-use the properties. But in some cases, it looks to us that the church might be looking at these properties, including a closed church that local parishioners are using for unsanctioned services against the Archdiocese’s orders, for their potential cash value in sales or non-exempt reuses in the future.

The Archdiocese needs the budget-balancing cash just like the municipalities do. The lessons to be drawn: (1) to protect the tax exempt status of property, make sure it is used for tax exempt purposes; and (2) if you do have to cease that use, make sure you can demonstrate to tax assessors clear plans to generate new tax exempt uses.—Rick Cohen