PA Supreme Court: “Church Parking Lots Tax Exempt Property”

A recent decision by the Pennsylvania Supreme Court could be bad news for taxing entities, particularly in urban areas. In the case of Wesley United Methodist Church v. Dauphin County Bd. of Assessment Appeals, the Court held that the Church’s parking lot was to be considered tax exempt property. Previously, only those portions of real estate that included worship-related buildings could be considered tax exempt. Vacant ground, such as parking lots, was considered taxable. According to the Church, the parking lot was essential to the continued functioning of the church, since without the additional off-street parking this urban church would lose parishioners. The Court agreed. Across the Commonwealth, now, municipalities and school districts are sure to face requests from churches, synagogues and other religious entities, seeking to obtain tax exempt status for parking lots. You should be aware, however, that the Court’s decision does not signify an absolute exemption for church parking lots. In order to be eligible for the exemption, the church must demonstrate that the parking lot is essential for its continued viability. Also, the church must be able to show that it does not use the lot for profit-making activities (such as leasing out the parking spaces during the week, for example). If you have any questions regarding the precise impact of this decision on your municipality or school district, feel free to contact me.


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