A property transfer tax battle between San Francisco's
assessor and the Roman Catholic Archdiocese of San Francisco is headed to
court. The city's Transfer Tax Appeals Board unanimously ruled December 1 in
favor of San Francisco Assessor-Recorder Phil Ting's position that the
archdiocese owes $14.4 million in unpaid property transfer taxes – the final
step in the official city-operated protest process that had to be exhausted
before the church could take its case to court.
The tax appeals panel – made up of the city controller, city
real estate director and city tax collector, or their designees – determined
that the church, in moving properties from one Catholic non-profit corporation
to another, was required to pay property transfer taxes. The taxes are
collected when properties are sold or transferred to a separate and distinct
legal entity.
The archdiocese maintains that the transfers were not
subject to the tax because they were part of an internal reorganization to
create "simple ownership models" for schools, parishes and the larger
archdiocese. Mr. Ting disagreed, and said the corporations involved in the
transactions have different boards of directors and are legally separate.
"The board members, all of whom are City Hall administrators
rather than members of the judiciary, apparently faced tremendous pressure in
view of the city's desperate need for revenue," Maurice Healy, spokesman
for the archdiocese, told the San
Francisco Chronicle. The newspaper noted that the city faces a $550 million
projected deficit over the next 18 months.
Mr. Healy accused Mr. Ting's office of "inexcusable
delays, and, at times, arrogance," in the handling of the case, which
began in the spring of 2008 when the archdiocese requested to change ownership
titles of more than 200 parcels – including churches, vacant lots, apartment
buildings, schools and storefronts – that city officials say are valued at
close to $2 billion. "We are glad that having exhausted the required administrative
process we can finally proceed to a formal, neutral civil court forum,"
Mr. Healy added.
The Transfer Tax Appeals Board issued its ruling orally, and
now will prepare a written report. (Source: San
Francisco Chronicle, December 1.)
Cal-TaxReports, December 7, 2009
© 2009 California Taxpayers' Association. All Rights Reserved.