In Living Word of God Ministries v. Allen County Assessor, Pet. No. 02-074-11-2-8-00002 (October 8, 2013) (March 1, 2011 assessment), a Church claimed that properties which it acquired, cleaned up and planned to build homes on should be 100% exempt. According to the Church: “The [Church] will sell the properties to people in the church and make homeowners out of people who would not otherwise qualify for traditional loans. The properties are sold on a rent-to-own lease and require no down payment and no deposit.” (Page 3, ¶ 11.) Here, the property when purchased had an improvement “in very bad shape.” (Page 3, ¶ 12.) The property was rented to people within the Church’s ministry. Because the property was rented, the Assessor deemed it taxable.
The party requesting a charitable or religious exemption must show that the property is owned, occupied and predominantly used for an exempt purpose. (Page 6, ¶ 23.) The Indiana Board first noted that, while the Church claimed that it was a 501(c)(3) tax exempt entity, the offered IRS determination letter referenced a different entity. The Church provided no explanation as to the relationship, if any, between it and the other entity. Regardless, “the grant of a federal or state income tax exemption does not necessarily entitle a taxpayer to a property tax exemption.” (Page 5, ¶ 21.) In deciding whether to apply an exemption, the Board must look to how the subject property is used. (Page 5, ¶ 22.) Church claimed the property was a “tool” of its ministry, but it “failed to provide substantial evidence or even explain how renting the subject property to people within its ministry constitutes a charitable or religious purpose.” (Pages 5-6, ¶ 22.) Consequently, the exemption was denied. (Page 6, ¶ 24.)