On February 10, 2011, the Supreme Court of Ohio decided The Chapel v. Testa case wherein it held that, just like any other institution, a church may achieve property-tax exemption for real property that it owns and holds open to the public for recreational purposes. The Court overturned the Board of Tax Appeals, finding that “if the use to which property is put otherwise qualifies as charitable, neither the fact of ownership by a religious organization nor the existence of religious motives in connection with the charitable use will defeat the claim of exemption.” The Chapel v. Testa, Slip Opinion No. 2011-Ohio-545.]
The property owner, a church, owned several parcels of property that were improved with a church, as well as several playing fields and a running trail surrounding the property’s perimeter. The church had received exemption for the church facilities, but the tax commissioner and Board of Tax Appeals had denied exemption for the portions of the property used for public recreation. The church used the playing fields to host a variety of sporting leagues. Most of the participants in the sporting events were not congregants of the church. The church used the property for public recreational use in support of its “sports ministry.”
The Court held that the property should have received exemption because it was owned by an institution—the church—and was accessible without charge to the public for recreational use. Thus, exemption for the property was appropriate under R.C. 5709.12—the general charitable use statute—and the church was not required to achieve exemption under R.C. 5709.07, which provides a more specific exemption for “houses of public worship.” The Court held that the church’s religious motivation for keeping the property available to the public for free recreational use did not prevent the church from taxing advantage of the general charitable-use statute. Thus, the Court confirmed “any institution, irrespective of its charitable or noncharitable character, may take advantage of a tax exemption if it is making exclusive charitable use of the property.”
In short, if a church (or any institution) owns property and uses it for charitable purposes — such as using the property to provide free recreational activities that are open to the general public — the church (or institution) may receive exemption for the property, even if a religious motive animates the church’s decision to use the property in a charitable manner.