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Bills Would Clarify Tax Exemption for Religious Property

State lawmakers are considering two bills that would clarify which properties used for religious purposes are exempt from property taxes and which religious organizations may seek exemption from property taxes in North Carolina. HB 229-Modify Religious Property Exemption and SB 458-Religious Orgs: Clarify Prop. Tax Exemption were filed partly in response to confusion over whether houses of worship under construction qualified for an exemption from property taxes.

“North Carolina gives tax relief to religious organizations because of the enormous benefits and services they provide to individuals and communities,” said John L. Rustin, president of the North Carolina Family Policy Council. “We are hopeful that the North Carolina General Assembly will approve these commonsense bills that clarify the intent of our state’s tax laws with respect to religious organizations.”

HB 229, which is sponsored by Reps. Allen McNeill (R-Randolph), Phil Shepard (R-Onslow), Dennis Riddell (R-Alamance), and Garland Pierce (D-Scotland), passed the N.C. House unanimously on March 26 and has been assigned to the Senate Rules Committee. The bill, in part, would clarify that, “A building and the land occupied by the building is exempt from taxation if it is under construction and intended to be wholly and exclusively used by its owner for religious purposes upon completion.”

The Christian Action League of North Carolina has reported on two churches that were assessed property taxes on their houses of worship while they were under construction. HB 229 would clarify that the property tax exemption applies to such buildings.

A related bill in the State Senate, SB 458, which is sponsored by Sen. Warren Daniel (R-Burke), would expand the “agencies” eligible to obtain tax exemption for real and personal property used for religious purposes to include, “Any other bona fide religious organizations, including those recognized by the Internal Revenue Service under section 501(c)(3) of the Code.” SB 458 was filed on March 25 and is currently awaiting consideration by the Senate Finance Committee.



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