July 14 1997

ARTICLE TOOLS

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Religious charities triumphed in a 5-to-4 U.S. Supreme Court ruling May 19 determining that states cannot levy property taxes on nonprofits merely because their constituents are primarily out-of-state residents.

In Camps Newfound/Owatonna v. Town of Harrison, the Supreme Court struck down a Maine Supreme Judicial Court decision against a Christian Science Church summer camp, where 95 percent of the registrants came from outside Maine. The camp had protested paying $60,000 in property taxes from 1989 to 1991, taxes that had not been required of charities serving constituents living chiefly within the state.

"By striking Maine's law, the Court slammed the door against state assaults on the skimpy coffers of charities nationwide," says Steven T. McFarland, director of the Christian Legal Society's (CLS) Center for Law and Religious Freedom in Annandale, Virginia. "Otherwise, we could have expected revenue-hungry states and cities to tax all but the smallest of charities."

Religious groups joining the CLS in filing a friend-of-the-court brief included the National Association of Evangelicals, World Relief, the Coalition of Christian Colleges and Universities, International Union of Gospel Missions, and the Christian Life Commission of the Southern Baptist Convention. Some cautioned that the slim margin of victory means the taxing of charities issue could soon crop up again in another form.