Rule Change Could Make it Easier for Counties to Tax Property at Churches

A proposed rule-change at the Arkansas Assessment Coordination Division could make it easier for county assessors to collect taxes on property that churches, charities, and other nonprofits own.

Currently, the Arkansas Constitution makes it clear that churches and charities are tax-exempt, and churches and charities generally don’t pay taxes on property they own unless they make some sort of profit from it.

The proposed rules would require churches and charities to file forms and paperwork with the county assessor that prove their property is exempt from taxation “beyond a reasonable doubt under Arkansas law.”

That’s a very high standard — and it gives county assessors tremendous leeway.

The forms also require churches and charities to give the county information that many people would consider private — like information about their staff’s salaries, bonuses, and other compensation. It isn’t clear why the county would need to know that kind of information.

If a county assessor decided to reject the nonprofit’s application for a tax exemption, the county could force the organization to pay taxes on anything it owns — land, buildings, vehicles, electronic equipment, machinery, and other property — as if it were a business.

The new rule could hurt many different nonprofits in Arkansas, including:

• Churches
• Charities like the Salvation Army or Union Rescue Mission
• Christian summer camps
• Private schools and private colleges and universities
• Food ministries
• Nonprofit hospitals and medical clinics
• Homeless shelters

Charities and churches contribute millions of dollars to the economy each year by serving their communities. That’s part of the reason the Arkansas Legislature voted to designate religious organizations and charities as essential earlier this year. Making it easier for counties to tax property at churches and charities hurts everybody.

Please contact the Arkansas Department of Finance and Administration today, and ask them to opposed Rule 6.01 – 6.04, the Property Tax Exemption rule that affects nonprofits, charities, and churches.

Email your comments against the rules to kayleigh.gilliam@dfa.arkansas.gov. All comments are due by Monday, May 31.

You can read the proposed rules here. You can read some of the paperwork churches and charities would have to file here.