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Posted by: Maricopa Lawyers on Mar 6, 2013

The effort to increase tax exemptions for religious organizations is facing opposition from both parties in the Arizona House of Representatives. House leaders Thursday moved to stall a vote on the law that would allow properties not used specifically for worship to receive tax exempt status.  The new expansion would allow for buildings like student dormitories, staff housing, and shelters to avoid taxation.

Opponents complained that the measure would open the state up to tax fraud from groups posing as religious institutions. Under the measure any group that calls itself religious could use the measure to expand land holdings at a great discount.

The language of the bill requires that an organization must inform the local county assessor of its intent to retain the property protected for its religious mission annually. The bill also forbids organizations from holding on to a property for a period of time to sell it for a profit. Critics of the bill complain that it will be difficult for the state to discern what an organization’s true motives are.

The bill has garnered the most support from the conservative-leaning Center for Arizona Policy citing religious rights. The bill’s sponsor Republican Rep. Justin Olson believes that the current law is too vague which results in lawsuits against county property assessors who do not have a full understanding of what organizations have received tax exempt status.

Olson says that he is working with county assessors on a compromise for the bill that will reach across the aisle.

The bill is aimed to help congregations that purchased land during the housing boom retain their properties without paying property taxes. Other counties have adopted similar measures and the state is looking to institute some uniformity statewide.