In a recent story about the largest farmland owners in Illinois, Prairie Farmer revealed that the Church of Jesus Christ of Latter-day Saints owns the most land, coming in at nearly 54,000 acres. That revelation prompted questions about the church’s tax-paying status. Does the church pay property taxes?

According to Julie Russell, chief county assessment officer for Fulton County, Ill., where the church owns two parcels, the church does pay property taxes on farmland because the land is used for profit. Land often is purchased by the church’s subsidiary, Farmland Reserve Inc.

Russell says churches are only given property tax-exempt status if they meet the requirements of Section 15 of the Property Tax Code, which states:

Sec. 15-40. Religious purposes, orphanages, or school and religious purposes.

(a) Property used exclusively for religious purposes, or school and religious purposes, or orphanages qualifies for exemption as long as it is not used with a view to profit.

(b) Property that is owned by churches or religious institutions or religious denominations and that is used in conjunction therewith as housing facilities provided for ministers (including bishops, district superintendents and similar church officials whose ministerial duties are not limited to a single congregation), their spouses, children and domestic workers, performing the duties of their vocation as ministers at such churches or religious institutions or for such religious denominations, including the convents and monasteries where persons engaged in religious activities reside also qualifies for exemption. 

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Or in other words, if the land is used for a church building of any kind, it’s exempt from property taxes. But farmland doesn’t count.

“Agricultural land is not one of the permissible reasons for a ‘Religious Organization’ to receive exempt status, since it’s used with a view to profit,” Russell explains.

Similarly, the University of Illinois and University of Illinois Foundation also pay property taxes on their 19,500 acres of farmland, again because farmland is not a “qualified use” under Section 15. The U of I Foundation came in at No. 4 on the top 10 list of absentee landowners in Illinois.

“We certainly want to ensure that those property taxes go back into the community to support the schools and local infrastructure,” says Meg Cline, vice president for gift planning and trust services for the U of I Foundation.

Cline adds that the foundation does not pay income tax on the farms because the farms are given as charitable gifts, and the foundation is a tax-exempt nonprofit.

Interested in more locations of the Church of Jesus Christ of Latter-day Saints’ land holdings? Check out this map from The Salt Lake Tribune and this story looking at the church’s wealth holdings.