According to yesterday’s news, the Church lost an appeal in the European Court of Human Rights and, as a result, will have to pay property taxes on the Preston, England temple.
Of course, the decision raises a number of questions, not the least of which is how a property tax dispute gets to the European Court of Human Rights in the first place. Other fair questions include whether this evinces European prejudice against the Mormon church and what ramifications this decision will have for the Church.
A quick pair of caveats: first, I’m not a UK solicitor; I don’t know the nuances of British law. Second, although I’m a tax person, I’m more an income tax person than a property tax person. And, with those two caveats firmly in mind, let’s go:
What’s at issue here?
The Preston temple complex houses not only the temple, but “a stake center, missionary training center, family history center, distribution center, patron housing facility, and temple missionary accommodations.”
The British government asserted that the Church owed property tax on all of these buildings except the stake center. Why would the stake center be exempt and not the rest of the buildings? Under the Local Government Finance Act of 1988, property tax applies at three potential rates. Most property is, presumably, subject to the ordinary property tax. Property used for charitable purposes is taxable at a much lower rate (20% of the ordinary rate). And property used “for the conduct of public religious worship” is exempt from property tax.
There was no dispute that that stake center was used for public religious worship. The rest of the buildings, the government held, were not.
The courts actually spent some time dealing with the non-temple buildings, ultimately holding that, though owned by the Church, they weren’t used for worship and, as such, were subject to the lower property tax rate.
But the temple’s clearly used for worship.
And the courts agreed. But, they said, it wasn’t “public worship.” The property tax exemption was intended to provide a public benefit, and that public benefit required public access. Because access to the temple is limited to members of the Church–and not even all of them–permitting the temple to be exempt from the property tax would contravene the policy underlying the exemption.
Why the ECHR?
The Church alleged that this differential treatment of the temple violated Articles 9 and 14 of the Convention for the Protection of Human Rights and Fundamental Freedoms, which guarantee the right to religious freedom and to be free from discrimination.
The Church argued that, by not exempting the temple from property taxation, the UK government imposed a tax burden not imposed on other religious structures, and this implicit discrimination acted prejudicially against the Church.
The ECHR found that the tax was not intended to address the legitimacy of Mormon belief and practice; moreover, it was neutral as applied. Any Mormon building that permitted public worship was exempt, while private churches of other denominations–including of the Church of England!–were subject to the reduced rates of taxation.
And, the court held, the low rate of taxation that would be imposed on the temple would not hinder the ability of the Church to worship.
So is the Church no longer tax-exempt in the UK?
The Church is still clearly tax-exempt in the UK. This dispute was over property tax, not income tax. The sole question was whether the Church would have to pay property tax on the Preston temple. Note that these decisions implicitly reinforce the charitable status of the Church–as a result of that status, the temple is taxed at a significantly-reduced rate.
Could the Church have somehow avoided paying tax on the temple?
Probably not. The language of the 1988 Act is pretty clear, and I think the ECHR is right that this doesn’t substantively impede our ability to worship, and I haven’t seen any evidence that the change was inspired by anti-Mormon animus. Unless we were to allow public access to our temples–a move I both don’t expect and don’t see as optimal–or the UK changes its property tax law, our British temples will be subject to property tax
What if we made like one room in the temple available to everyone? A waiting room or something?
The 2008 decision indicates that the tax can be apportioned according to the amount of access. If that’s right, then I suspect granting limited access wouldn’t do a lot to help. The temple, according to the decisions, has an internal area of about 6,300 square meters. If the waiting room were 630 square meters, then 10% of the temple would be exempt from property tax. That would, I suppose, provide some savings, but it wouldn’t be a substantive amount.[fn1]
Will this establish a harmful precedent in Europe? That is, will every country start imposing a property tax on our temples?
Maybe, though I’m skeptical. The ECHR cared that the property tax (a) was generally applicable, and (b) was not motivated by a desire to get the Mormon church. I don’t know its process well, but I suspect that, if a country changed its property tax specifically to tax Mormon temples, the outcome would have been different.
Still, couldn’t this be the result of anti-Mormon animus?
Certainly. But I don’t think it is. The opinions are written carefully and professionally, and don’t focus on any peculiarity of Mormon practice. Instead, they carefully parse the law and come to a perfectly reasonable–and almost certainly correct–conclusion.
I bet the Church is unhappy about this, though.
It’s going to cost the Church money, clearly. But the Church’s response is, in my opinion, perfect:
The Church of Jesus Christ of Latter-day Saints respects the decision of the Strasbourg court, and is grateful that the charitable activities of churches are recognized under UK and European law
[fn1] I’m sure, of course, that there is some wiggle-room here; I’m entirely sure (or, at least, as a practical matter I assume) that a church doesn’t lose its property tax exemption if the public doesn’t have access to its administrative offices, for example. But where 90% of the building is inaccessible, I suspect that you wouldn’t get a full exemption.