Christian group seeks tax refund for troubled school property

WOODSTOCK – A religious group whose Christian school in Maurertown closed a few years ago wants a refund of almost $33,000 from Shenandoah County.

The Community Christian School of Shenandoah Valley Inc. has asked the county for a donation of $32,788 that represents back taxes, penalties and interest associated with real estate taxes assessed on property the organization once owned at 23749 Old Valley Pike.

Woodstock attorney Paul J. Neal Jr., representing Community Christian School appeared before the Shenandoah County Board of Supervisors on Thursday to discuss the refund request. Supervisors decided to take up the request at their work session after Neal presented the matter to the board on Sept. 12.

The county revoked the property’s exemption from the local real estate tax in 2012 and 2013 when the school ceased operations. The taxes paid to the county by Community Christian School are from 2012 and 2013, Neal told the board.

Online records show that the latest real estate assessment valued the 5.26-acre property at $3.96 million, most of which covers the building constructed in 2007. Community Christian School sold the property to My Church, based in Strasburg, on June 16 for $1.7 million.

The property did not sell for the recently assessed value, Neal told the board.

Information provided by the county shows the $32,788 breaks down as follows: Principal amount of $19,264; penalties of $1,926; interest of $8,750; attorneys’ fees of $2,764 and $83 in related legal costs.

Community Christian School has maintained its status as a religious, 501(C)3 organization, Neal said. The school reimbursed its investors, Neal said. Should the county approve the refund, Neal said, the Community Christian School board would divide up and distribute the proceeds to other Christian schools or or charities with a similar mission.

The discussion turned to a criticism of Commissioner of the Revenue Kathy Black. Vice Chairman Richard Walker questioned Black’s decision to revoke the property’s exemption. Walker asked Black why she revoked the exemption.

“In my opinion, the mission statement was to educate children in a Christian environment and when the school closed they were no longer fulfilling their mission,” Black said. “We have other similar types of entities that have closed their doors and have been treated the same way where they have started being taxed at the fair-market value and have lost their exemption.”

The county has taxed churches for extra space in excess of what’s necessary to maintain their compounds at the fair-market value or at the land-use assessment, Black explained.

“So I feel like they were treated like any other exempt entity would be when they closed their doors,” Black said.

District 4 Supervisor Cindy Bailey asked Black to explain the school’s loss of its exemption in light of the organization maintaining its status with the Internal Revenue Service. Neal explained that Black spoke of the real estate tax exemption. An organization with 501(c)3 status doesn’t necessarily make them exempt from local taxes, Black said. The Board of Supervisors makes that determination for any 501(c)3 that requests an exemption from local taxes, Black reminded members. Supervisors decide whether or not the organization meets the guidelines for the exemption and provides benefits to the community, Black added. The commissioner said she would start taxing any organizations that stop the activities that prompted the board to grant them an exemption.

Neal said he disagreed with Black’s decision to revoke the organization’s exempt status.

Toward the end of the discussion, Assistant County Administrator Evan Vass advised that the state code prohibits the local government from making contributions to religious organizations. Walker suggested that county officials check on the prohibition before moving forward.

“I can understand, OK, when all of a sudden the school closed if you turned around and rented it to Dick’s Sporting Goods, then obviously that wouldn’t be a nonprofit use,” Walker said. “What you’re indicating is that it went from that nonprofit use to the first time that you began to receive monies was for another exempt nonprofit use and therefore that exemption was reinstated.