San Francisco’s Tax Grab

The Archdiocese of San Francisco is embroiled in a major tax dispute with the city of San Francisco.

At issue: The city’s bid to collect up to $15 million in taxes it claims are due on more than 200 properties the archdiocese is transferring among Catholic non-profit organizations the archdiocese controls.

The properties are being transferred under an archdiocesan restructuring of its assets.

The city’s position is that because the properties are being shifted among legally separate entities, and because some small properties held by the nonprofits are not directly owned by the archbishop, all of the properties involved in the reorganization are subject to tax.

The archdiocese has filed an appeal of the assessment with a review board, according to the San Francisco Chronicle.

“San Francisco Recorder Phil Ting has taken a step that is unprecedented in the history of the state of California. He has determined that an internal reorganization of Church property, within the family of corporations of the Archdiocese of San Francisco, constitutes a ‘sale’ and is subject to a property transfer tax,”  archdiocesan spokesman Maurice Healy said in an e-mail, the Chronicle reported. “The law is overwhelmingly in favor of the archdiocese in holding that church property transfers of this nature are exempt from transfer taxes.”

— Tom McFeely