Over the weekend the Catholic Archdiocese of San Francisco fired back against me for asking them to pay the city transfer tax the law says they owe to the City and County of San Francisco.
The Archdiocese called my decision to ask them to pay transfer taxes shameful, and the spokesperson for the Archdiocese insinuated that my decision was based on the city’s budget deficit, the Churches position on Proposition 8, or even on political considerations.
Here’s news for you folks – if I was taking on one of the world’s oldest and most powerful institutions for “political considerations,” I am not a very calculating politician.
What I am is Assessor-Recorder of San Francisco with a sworn duty to treat everyone equally under the law. And the law in this case is clear, despite this recent press offensive which is designed to muddy the waters. (edit by Brian, see the flip…)
Unless the transfer falls within an exemption, the San Francisco Transfer Tax Ordinance imposes a tax on any person or entity, including non-profit corporations, who transfer property within San Francisco. When the Archdiocese transfers legal ownership of property, it owes a transfer tax. There is no exemption from transfer tax for religious institutions transfers either under state law or the San Francisco ordinances, such exemption having been considered and rejected.
The Church citation of Canon Law of the Roman Catholic Church to support their claim that they do not owe the tax is interesting from a scholarly perspective, but completely irrelevant from a legal one. We are controlled by California laws, not by church practices.
If the Church merely wanted to “re-organize,” there is a way to do so in a fashion that does not require paying the transfer tax. But its decision to legally transfer assets to newly created separate entities to give itself legal protection from lawsuits is just one of the factors showing that this is not a mere reorganization, but a legal transfer as defined under California law.
The law is the law. It remains the law in good budget times and bad. It remains the law whether you agree or disagree with the behavior or the individuals and corporations.
The representatives of the Catholic Church can demonize me all they want. I know we are on the right side of the law.
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.
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!
I feel this section from SFGate really sums up the situation:
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.
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.
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.