Pastor James Howell. Photo courtesy of the Wyoming County Press Examiner.

If a church is exempt from real estate taxes, should the entire structure be exempt? Common sense says yes. In a recent Pennsylvania court case, a county tax board argued no.

When Northmoreland Baptist Church, Tunkhannock, Pa., built a new facility, the state wanted to collect taxes from the church’s new fellowship hall, even though under state law, churches are exempt from real estate taxes. In early 2011 the county sent two tax bills totaling more than $3,000, arguing that “the gymnasium portion does not qualify as a state place of worship.” While the church decided it was in its best interest to pay the controversial bills on time, it also filed an appeal of the tax assessment.

The two sides took the issue to court in October, and Wyoming County President Judge Russell Shurtleff has rendered a decision: the fellowship hall of Northmoreland Baptist Church should be exempt from taxation.

Fueling the debate last year, the county’s chief tax assessor, Eric Brown, explained that the sanctuary, Sunday school rooms, and kitchen were already exempt because they were used primarily for religious purposes. The fellowship hall, he said, was really a gymnasium used for recreation and did not meet the county’s standards of a religious ministry.

Northmoreland hosts a variety of activities in its hall—dinners, wedding and funeral receptions, blood drives, Bible studies, Sunday School classes, new membership and baptism classes, children’s and teens’ ministries, Vacation Bible School, open gym. But those events, Brown said, were not “conducted on a regular basis.” Twisting the knife, he added, “Just because they say it’s a church doesn’t mean it’s a church.”

James Howell retired March 4 from Northmoreland Baptist Church after 30 years as pastor there and 45 collective years in ministry. The church itself was founded in the 1800s and has always had a fellowship hall to gather in. In 2006 the church broke ground for a new building, and completed the 18,000-square-foot facility in August 2008 with the help of Baptist Missionary Builders.

As an afterthought, basketball hoops were installed in 2010, and court lines on the floor were painted that fall. That year the county took notice of the church’s facility and added its all-purpose room to the county’s 2011 tax rolls. An appeal hearing before Judge Shurtleff on Oct. 25 sought to determine whether the taxation was just.

The Independence Law Center of the Pennsylvania Family Institute provided free representation to Northmoreland Baptist at the hearing. “We have no animosity toward the county,” said co-counsel Nate Fox, “but we want the policy to change so that Northmoreland Baptist Church and the other churches in Wyoming County can be free from taxation.”

“We want the policy to change so that Northmoreland Baptist Church and the other churches in Wyoming County can be free from taxation.”
—Nate Fox, Independence Law Center of the Pennsylvania Family Institute

The court documents noted that the church’s stated mission includes “facilitating fellowship among believers and serving others in the community.” In addition, the court noted, the facility is used for Sunday School classes, children’s ministry, prayer groups, and evangelistic outreach.

During the trial, the church called Dr. Michael Stallard, dean of Baptist Bible Seminary, as an expert witness. He told the court that the all-purpose room was designed to accommodate a wide range of functions enabling the church to expand its influence and to help people change their lives.

In his ruling, Judge Shurtleff said, “Simply because there are basketball hoops does not render the room a gymnasium.” The judge also noted that the all-purpose room did not include a regulation size basketball court, nor did it have a wooden floor, locker rooms, or scoreboards.

Pastor Howell praises God for the judge’s decision, saying, “If a church cannot have a tax-exempt ministry within its walls, then there’s something wrong with this country.” Judge Shurtleff is a man of law, Howell says, and “this case shows he’s certainly a man of logic. Our church is grateful for his fairness and upholding religious liberty.”

Melissa Meyer is associate editor for Regular Baptist Press.