November 30, 2023

Local Government Charging Taxes on Church Disguised As Fees

A Texas church is suing the native authorities, claiming that “illegal excessive” charges to put in a water faucet violate the U.S. Constitution and the state’s spiritual freedom law.   

First Liberty Institute, a authorized group targeted on religious liberty, and King & Spalding LLP, a global legislation agency, filed the lawsuit Wednesday towards Southern Montgomery County Municipal Utility District on behalf of Grace Community Church in The Woodlands, Texas. 

“The county’s water tap fee scheme is a thinly veiled illegal property tax on Grace Community Church,” Jeremy Dys, senior counsel at First Liberty Institute, advised The Daily Signal in an emailed assertion Thursday. “Local governments like Montgomery County, in search of new revenue, are illegally targeting churches and other non-profits with similar schemes.”

The district initially advised the church that labor and supplies would price $24,900 to hook up with the water line. Later, the church requested the district to put in the water faucet, which the district stated would price $61,500, which is way increased than the precise price. The church challenged the fee due to its tax-exempt standing, at which level the district countered with a faucet payment of $147,938, greater than doubling the prior payment. Eventually, the church had no alternative however to pay the charges.    

“No government agency should impose a ‘fee-in-lieu-of-taxes’ against faith-based entities,” Dys advised The Daily Signal. “What we see now is merely an effort to generate revenue by those the State of Texas have protected against taxation because of the tremendous good they do in the community.”   

Dys stated the church had not heard of every other complaints concerning the district inserting unlawful charges on every other entities.

“To be clear, there is no dispute that Grace should pay and is willing to pay tap fees reflecting the district’s actual costs to install a water tap and provide service to Grace,” the church writes within the lawsuit’s preliminary assertion.    

The district is instructing Grace Community Church to pay further charges that aren’t associated to the water faucet or any service supplied, and the district “admits as much,” in keeping with the preliminary assertion.   

The church is making three authorized claims towards the district: that the district violated the Texas water code, that the district violated the Texas Religious Freedom Restoration Act, and that the district violated the free train clause within the U.S. Constitution’s First Amendment, integrated to the states by the Fourteenth Amendment. 

“A party that pays unlawful taxes or fees to a governmental entity under duress may recover those fees” below the Texas water code, the lawsuit notes.

The lawsuit claims that the district violated the Texas spiritual freedom act by inserting “a real and substantial burden on Grace’s and its members’ free exercise of religion.”

The go well with additionally claims that the district’s transfer “restricts Grace’s ability to provide services tied to the central tenants of Grace’s and its members’ faith,” in violation of the U.S. Constitution.

Dys advised The Daily Signal that he’s hopeful Grace Community Church will triumph on this lawsuit.  

Churches like Grace Community are important parts of the communities they serve,” Craig Stanfield, a accomplice within the agency of King & Spalding, stated in an announcement on the lawsuit. “The resources of churches are best used in fulfilling their mission to serve their congregations and communities, not in paying unlawful taxes. We look forward to securing a refund for Grace Community.”  

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