Court rejects city claim to tax church parking lot
A church near a popular Milwaukee concert venue has won back a tax exemption for its parking lot, even though the money it generates from music fans accounts for a significant part of the church budget.
Central United Methodist Church is located at North 25th Street and West Wisconsin Avenue, just down the block from The Rave/Eagles Club. On nights when the venue hosts shows, church volunteers advertise Central United’s 43 parking spaces, for a suggested $10 donation each.
In 2016 that brought in more than $15,000, and almost $23,000 in 2017.
So in fall 2017, the city decided the parking activity wasn’t really a core religious function, dropped the lot’s tax exemption and sent Central United a $4,400 tax bill.
The church sued.
Circuit Judge Paul Van Grunsven agreed that providing parking for concert-goers didn’t seem like the sort of benevolent or charitable use lawmakers had in mind when granting tax exemptions for churches.
“This use of the property does not accrue benefits to mankind directly nor does it relieve the state from expenses, as providing free flu shots to the poor would,” Van Grunsven wrote.
He noted the concert parking occurred about 48 times a year and the income accounted for between 12% and 18% of the church’s budget.
Central United, the judge found “has not met its burden of establishing it exclusively uses its parking lot for exempt purposes, as required by the statute, the lot is taxable for the time period at issue.”
Last week, the Court of Appeals reversed that decision.
To avoid taxation, the church needed to show it is a benevolent association, owns and exclusively uses the lot, and exclusively for exempt purposes.
Writing for a three-judge panel, Judge Joseph Donald found the nonexclusive use incidental, and not enough to jeopardize the tax exemption.
“Central United simply took advantage of the grace of proximity — approximately four times a month — and found a way to benefit from use that was already occurring,” Donald wrote.
“Such use does not undermine Central United’s use of its property for benevolent purposes all throughout the year. This use was incidental.”
The opinion explains that Central United only started staffing its lot with volunteers, and accepting recommended donations for parking, after neighbors unaffiliated with the church started charging concert fans to park there.
And the money, in the end, does support the church’s main mission.
“All donations support the functioning of the church and its many activities, ranging from community support groups, to food pantries and mission trips, to children’s activities, to Bible school,” Donald wrote.
“Therefore, while the amount brought in by the parking lot use may not necessarily be inconsequential, as the circuit court found, it certainly is incidental.
Contact Bruce Vielmetti at (414) 2242187 or bvielmetti@jrn.com. Follow him on Twitter at @ProofHearsay.