PJI Helps Church Win Opening Round of Battle Over Property Tax’s Constitutionality

San Rafael, CA–Represented by the Pacific Justice Institute (PJI), a San Rafael church has won round one of its battle with the City of San Rafael over the constitutionality of a local tax on non-residential structures.



In September 2017, Valley Baptist Church (VBC) filed a lawsuit in Marin County Superior Court asking that the City’s Paramedic Services Special Tax be declared invalid as applied to the church under the California Constitution. The City’s voters enacted the Tax, which taxes non-residential structures at a rate of up to 14 cents per square foot, via referendum by a two-thirds vote in 2010. Because the California Constitution exempts buildings used exclusively for religious purposes from property taxation, VBC sued to have the Tax declared unconstitutional as applied to the church, as well as to recover monies paid under protest pursuant to the Tax as a condition of filing suit.

In an effort to uphold the Tax, the City attempted to get VBC’s case thrown out of court, filing a motion for judgment on the pleadings in March 2018. Among other things, the City asserted that VBC did not state a claim for which relief could be granted because the Tax, in the City’s view, is a “special tax” and not a “property tax.” VBC countered that the Tax was, in fact, a “property tax”—the “special tax” label notwithstanding—because it triggered a duty on the part of owners of non-residential structures on real property in San Rafael to pay the Tax.



The Court sided with VBC, denying the City’s motion in its entirety. Because the Court has determined that VBC has stated a valid claim for relief, VBC can now proceed to have its case heard on the merits.



“This is a huge victory for churches all over California,” said PJI President Brad Dacus. “If all a city has to do to tax churches in the state is call a proposed tax on real property a ‘special tax,’ place it on a local ballot and get two-thirds of the city’s voters to approve it, then the city has effectively found a way to get around California’s constitutional and statutory provisions protecting church property from taxation. That would defeat the whole point of having such protections to begin with.”



Federal, state, and local governments have long granted tax exemptions to churches and other religious non-profit organizations because of the significant and beneficial social services such religious organizations provide to their communities.



Churches or religious organizations that need assistance in a tax-related matter are encouraged to contact PJI at (916) 857-6900.