First Evangelical Christian Church and Motorcycle Repair Shop, Clements Minnesota
First Evangelical Christian Church and Motorcycle Repair Shop, 19 Pine Street
I’m telling you, the answers to all life’s enduring questions are right there in the tax code. You can learn about birth, growing up earning money cutting grass or washing cars, going to college, getting married, getting a job, starting a business, buying a house, having kids, getting divorced, maybe hit by a car along the way or winning the lottery, retirement, and even dying with a stepped up basis. And yes, you can learn about religion. Its all right there in the tax code.
Out in Clements, Minnesota (population 153), Richard Clements — a descendant of the town’s namesake — bought an old garage from the delinquent tax lists and from which he repaired motorcycles and old Corvettes. To pass the time as he fixed bikes and cars for passers-thru, he found himself witnessing his faith. Feeling God’s call, he went online and ordered himself an ordination from Rose Ministries out in Las Vegas. All he needed was a credit card. And then he promptly filed for property tax exemption for the former motorcycle and Corvette repair shop. With a population of only 153, and probably only a percentage of those folks being property owners, the case shines a light on the impact of tax exemption. Nationwide, the increase in tax for the rest of us that happens when one of us is exempt is miniscule and undetectable. But a town of only 153 people is a nice laboratory in which to measure the “incidence” of tax exemption.
Is the “motorcycle ministry” a church? The Minnesota Tax Court in First Evangelical Christian Church v. County of Redwood had to answer that question. Here is an excerpt from the opinion released last week:
A threshold question is whether the entity claiming the exemption is a “church” within the meaning of the statute.” Id. at 204. The test for determining whether an organization is properly considered a church for tax purposes is subjective, focusing on sincerity of belief, but “taking into account” evidence on objective factors. Id. at 205 ; see also Ideal Life Church, 304 N.W.2d at 315 (“Each case must be decided upon an analysis of its own unique facts.” (quoting Worthington Dormitory, Inc. v. Comm’r of Revenue, 292 N.W.2d 276 , 279 (Minn. 1980) (cleaned up)). Those objective factors include:
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- whether “the preconceived and primary, if not the sole, motive” behind the organization was tax avoidance in favor of the private individuals who control the corporation;
- whether the doctrines and beliefs of the organization are intentionally vague and non-binding upon its members;
- whether the members of the organization freely continue to practice other religions;
- whether the organization has formally trained or ordained clergy;
- whether the organization has sacraments, rituals, education courses or literature of its own.
- whether the organization has a liturgy, other than simple meetings which resemble mere social gatherings or discussion groups rather than religious worship;
- whether the organization is an institution which advances religion as a way of life for all [persons];
- whether the organization requires a belief in any Supreme Being or beings.
AFC, 530 N.W.2d at 204 . “By combining these two approaches, we avoid the risk of favoring religious bodies which are similar to mainline churches, and disfavoring others which may be equally sincere, but are non-traditional in their organization, their theology or their methods of worship.” Id. at 205. The supreme court concluded that “the principal motivation of Page was tax minimization,” not sincerely held religious belief. Id.
It didn’t help that Mr. Clements charged congregants for the repair services they received while hearing the word of God, and he even sued one such congregant for failing to make “donations” calibrated by reference to parts and labor. Well, you can probably guess the outcome without me quoting any more from the opinion.
darryll k. jones