The city of San Rafael, California, has been ordered to refund to a church nearly $14,000 it collected in a property tax that was forbidden by the state Constitution.
Valley Baptist Church paid the “Paramedic Tax,” which the city decided to apply to non-residential structures, under protest while it fought the policy in court.
Now the Marin County Superior Court has determined the tax is a property tax, and even voters are not allowed to “skirt the California Constitution’s provision exempting buildings that are used exclusively for religious worship from taxation,” according to the
“The Legislature has declared that church buildings are exempt from property taxation, and cities have a duty to honor that,” PJI President Brad Dacus said. “The city of San Rafael chose not to, and hopefully this case will send a message to other cities that they cannot willfully ignore churches’ rights under the California Constitution in order to generate revenue.”
Ray Hacke, a PJI lawyer who represented Valley Baptist Church in the civil case, noted Jesus said “render to Caesar that which is Caesar’s,” citing Matthew 22:21.
“He said nothing about letting Caesar reach into churches’ pockets to take that which does not belong to him,” Hacke said. “That’s what the city of San Rafael tried to do here by ignoring California’s tax exemption for church buildings, and PJI made sure the city didn’t get away with it.”
The trial concerned the city’s Paramedic Services Special Tax, which was approved by two-thirds of the city’s voters in 2010. It empowers the city to annually tax non-residential structures at a rate of up to 14 cents per square foot. At issue were two questions of law: one, whether the Paramedic Tax is a property tax, as opposed to an excise tax; and two, if the tax is a property tax, whether its status as a voter-approved “special tax” allows the city to skirt the California Constitution’s provision exempting buildings that are used exclusively for religious worship from taxation.
The court ruling said yes, the tax is a property tax, and no, the city cannot overturn the state constitution’s provisions.
PJI said Valley Baptist’s victory could have implications for cities and churches statewide, especially if an appellate court affirms the trial court’s ruling.
In his trial briefs, Hacke cited a case showing cities have an obvious incentive to re-label their taxes to get around the California Constitution’s provision exempting church buildings from taxation.”
The city was ordered to refund $13,644, plus interest.
that it could call the assessment a “special tax” exempting it from limits on property taxes.
when Valley Baptist took the case to Superior Court for Marin County after San Rafael applied its new tax to the church property.
“People in government thus unfortunately assume that churches aren’t paying their ‘fair share’ without understanding why they’re tax-exempt to begin with,” Dacus said.