Angels and Demonizing

Go Phil! (3.00 / 1)

Thanks for all of your hard work on this issue. Considering so many valuable City social services to the poor are being adversely affected by the budget, I would hope that the Catholic Church would choose to pay it's fair share.  

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by: nicthebrick @ Wed Jun 10, 2009 at 11:30:50 AM CDT

Great job! (4.00 / 1)

It's pretty absurd when a religious organization insists that it is being persecuted because it is being subjected to the same laws that apply to everyone else.  Maybe the church thinks that it is above the law, but I'm glad that my city's Assessor/Recorder does not agree with them.  

Keep up the good work, Phil!

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by: Be_Devine @ Wed Jun 10, 2009 at 14:05:17 PM CDT

If/Then (0.00 / 0)

I feel this section from SFGate really sums up the situation:

Ting, however, compared the practice to a private business creating a limited liability company or corporation in order to protect owners from bankruptcy or other legal judgments. He said the move is completely legal but that the church cannot have the asset protection and also escape the tax bill.

"They claim this is a mere reorganization, but those are usually cosmetic - a company changing its name but the owners all staying the same," Ting said. "This is not the situation. They have a different set of board of directors, members, controls. In our opinion, this isn't just a change - these are separate legal organizations.

"I don't care what their motivation is, but if they want separate legal entities they have achieved it and by achieving it they also owe the city and county of San Francisco a transfer tax," he said.

 The logic of this situation boils down to a simple if/then statement: IF the "transferred assets" are now considered to be separate from the rest of the Archdiocese's assets for potential lawsuit applications, THEN the Archdiocese owes taxes based upon those assets.  Claiming that your organization's laws supercede those of the state in which that organization operates is no more a valid arguement than claiming that the bylaws of the California Association of Cannibalism (CAC) allow the CAC to murder and rotisserie whosoever they like.  Similarly, saying a person should not be allowed to do their job (such as collecting taxes owed) because that person might be predisposed towards a given philosophy, a brand of politics, or actually doing their job is a bit of a logical fallacy, as well. Perhaps if the church would prefer to NOT sell properties to pay for lawsuit damages, they would be wiser to avoid creating an environment in which the actions that lead to lawsuits can be performed.

Omnium Bonum Est

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by: Sean Coincon @ Wed Jun 10, 2009 at 14:49:27 PM CDT

More info needed (0.00 / 0)

California Constitution, Article XIII, Section 3(f) exempts from taxation buildings, lands, and equipment used for religious purposes.  What exactly was transferred that makes this "transfer" subject to taxation?  The reason I put the word "transfer" in quotes is that the diary does not seem to tell us exactly what was transferred.  The diary reports that "property" was transferred.  What type of property?

Please fill us in.

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by: Doll @ Wed Jun 10, 2009 at 15:02:01 PM CDT

I'm no tax expert, but . . . (0.00 / 0)

It seems that you've misinterpreted the constitution. It does not, as you say, broadly exempt any property that is "used for religious purposes." Instead, Art. XIII, sec. 3(f) exempts "Buildings, land on which they are situated, and equipment used exclusively for religious worship."  That's a pretty narrow exemption.  The Archdioces owns a number of buildings that are not used religous worship at all, such empty lots, commercial properties, schools, etc..  Arguably, even the church building itself is not used exclusively for worship.  After all, they have AA meetings, community meetings, and other non-worship events in the church building.

There are plenty of people out there who know much more than I on this subject, but that's my 2 cents.

 

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by: Be_Devine @ Wed Jun 10, 2009 at 15:14:27 PM CDT

[ Parent ]

That's my understanding as well (0.00 / 0)

I wouldn't try to apply it to the church building itself, but any church school or administrative office was plainly meant to be excluded from the provision, it's a very narrow rule.  I suspect there's going to be case law on point when you have a single parcel with both a church sanctuary and a school or the like.

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by: auron renouille @ Wed Jun 10, 2009 at 15:38:54 PM CDT

[ Parent ]

I'm going to try to be nice here (6.00 / 2)

but really, you need to read more carefully, especially if you're trying to quote law:

SEC. 3.  The following are exempt from property taxation:
[...]
  (f) Buildings, land on which they are situated, and equipment used
exclusively for religious worship.

The tax in question here is a transfer tax -- basically a sales tax on property transactions.  It's not a property tax.  While the Chron is hardly an authority, they did state this very clearly in the article on the subject:

Nonprofits are exempt from property and federal income taxes but subject to property transfer taxes, which are collected if they sell or transfer properties.

One might note that this quote is in the Chron article linked in an earlier comment, and the specific text of the CA Constitution is freely available on the web.  

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by: jsw @ Wed Jun 10, 2009 at 15:42:04 PM CDT

[ Parent ]

Annual Property Tax vs. One-Time Transfer Tax (5.00 / 1)

Indeed, what we're talking about here has nothing to do with annual property tax - the Church remains exempted from having to pay annual property tax under the state of California Revenue and Taxation Code.  And they also remain exempted from the IRS federal income tax due to their 501(c)3 non-profit status.  These taxes are entirely different from transfer tax which is a one-time, local tax.  Under San Francisco's Real Property Transfer Tax Ordinance, the 232 properties transferred in this case, which includes vacant lots, parking lots, commercial buildings, parishes and schools, were not exempted.  The imposition of San Francisco's local transfer tax has no effect on the church's current standing with property tax or federal 501(c)3 non-profit exempt status.


Phil Ting
San Francisco Assessor-Recorder  

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by: philting @ Wed Jun 10, 2009 at 18:52:45 PM CDT

See . . . (0.00 / 0)

I told you there were people out there who are much smarter than me on this issue.

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by: Be_Devine @ Wed Jun 10, 2009 at 18:58:35 PM CDT

[ Parent ]

Which raises another question (0.00 / 0)

What if the particular building transferred was a church used exclusively for worship?  Does the City of San Francisco still insist that it has the right to impose a transfer tax?  Is it because the tax is on the transfer and not on the building itself?  What about the state Constitution in such an instance?

As a non-native, I have been amazed (and sometimes appalled) at the power given to municipalities in California.  My concern here is whether the City maintains that it is not bound by the state Constitution.

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by: Doll @ Wed Jun 10, 2009 at 20:13:06 PM CDT

[ Parent ]

The law is all on the books (0.00 / 0)

Do the research if you're curious.  

Here's the state constitution.

And here's the tax code.

Or call a real estate or tax attorney and ask them.

But stop hinting that the City of San Francisco is somehow beating on the church here in contravention of the state constitution unless you can do the work to show otherwise.

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by: jsw @ Wed Jun 10, 2009 at 20:17:39 PM CDT

[ Parent ]

As a follow-up (0.00 / 0)

one should note that even the church here is not contesting that it would have to pay transfer taxes for property transfers.  It's arguing that the transfers in question aren't as a technical matter the right sort of transfers.

In other words, even the affected entity here isn't making the argument you're trying to make.

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by: jsw @ Wed Jun 10, 2009 at 20:23:30 PM CDT

[ Parent ]