Who doesn’t have to pay? Shelby County missing out on $7.8 million

Published 12:00 am Tuesday, April 26, 2005

For three weeks, Shelby County property owners who did not paid their 2004 property taxes were listed in the Shelby County Reporter.

It was their last chance at paying taxes before their property is sold on the steps of the courthouse.

There are hundreds of individuals and groups, however, who won’t pay property taxes this year. And they’re not breaking the law, either.

Nearly $7.8 million in potential property tax revenues were exempted last year, according to Shelby County Property Tax Commissioner Annette Skinner.

In contrast, the county assessed $103 million in property taxes last year.

The state exempts numerous groups and individuals every year from property tax payments.

Groups exempt

Churches are among the groups that benefit most from tax-exempt status.

According to state law, &uot;all property, real and personal, used exclusively for religious worship&uot; is exempt.

While the county tax office does not calculate tax-exempt savings based on specific groups, local churches likely save into the millions.

Some churches are saving a significant amount due to their status:

* The Church at Brooks Hills, located on Highway 119 near Inverness, was exempted from $351,900 in property tax costs last year, according to county tax records. The church’s assessed property value exceeds $5.38 million.

* First Baptist Church of Pelham was exempt from nearly $100,000 of property taxes last year. The church’s assessed property value exceeds $1.72 million.

* Even smaller churches can benefit. The Methodist Episcopal Church in Calera is exempt from $129.60 per year. The church’s assessed property value is $2,400.

The only exception for tax-exempt status is if the church is not presently using the land for religious activity.

&uot;If they have land and don’t have anything on it, it is not exempt,&uot; Skinner said.

For example, First Baptist Church of Alabaster was assessed $4,872 in property taxes last year for 21 acres of land, with an assessed value of $84,000. That includes $1,176 in city taxes.

The Church at Shelby Crossing in Pelham was assessed $4,147 in taxes for 2004 for 12 acres of land with an assessed value of $76,800.

Pastors have to pay property taxes, unless they live on a church parsonage owned by the church. Then, no taxes would be required on the parsonage.

Schools benefit

Schools in Shelby County are also exempt.

The Board of Education, the University of Alabama and the University of Montevallo did not pay property taxes in Shelby County last year, according to county tax records.

Even private schools receive breaks.

Shelby Academy in Montevallo is exempt $13,284, based on assessed property value of nearly $302,000.

Coosa Valley Academy in Harpersville is exempt $10,030, based on assessed property value of $204,700.

Elderly and disabled

There are significant tax breaks available for older residents and disabled residents, depending on the amount of their income each year.

&uot;Some of them would only be partially exempt,&uot; Skinner said.

* Credit for all state tax is given for those 65 or older or permanently and totally disabled.

Any owner-occupant over 65, or totally disabled, having a net annual taxable income of $7,500 or less, is exempt from taxes on the principal residence. Those with a taxable income of between $7,500 and $12,000 would receive a $5,000 exemption off their property values.

* There are also property tax breaks for deaf mutes and the blind.

Business credits

Property tax abatements are also available as an incentive to attract new industries and encourage business expansion throughout the county.

Those businesses can apply to have all property taxes exempt except for those going toward education.

SYSCO in Calera realizes a 39 percent savings in property taxes because of abatements.

The county lists 2004 tax payments by the manufacturer as $133,741.46, and tax exemptions at $85,104.12. The company’s assessed property values are a little more than $4 million.

Other groups or items that can receive tax-exempt status include: charitable groups; property used for hospital purposes (assuming at least 15 percent of business is for charity patients); property owned by the American Legion, Veterans of Foreign Wars or the Disabled American Veterans; property on which cotton, livestock or other agricultural products are raised and grown in the state; athletic stadiums; and property owned by the Alabama National Guard