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Committee hears bill to protect small religious organizations from parsonage property tax assessments
Summary
A bill to limit when small religious organizations can lose property tax exemptions drew testimony Tuesday, with sponsors saying assessors have sometimes taxed parsonages when a pastor no longer lives on site and municipal representatives warning the proposal could shift costs or require legal clarification.
House Bill 585 drew a packed hearing in Ways and Means where sponsor Representative John Janigian of Rockingham District 25 described cases of small congregations facing property tax bills when a parsonage ceased to be occupied by a resident pastor.
Janigian told the committee the law at RSA 72:23 currently exempts parsonages but some assessors have taken narrower readings: if the parsonage is rented out rather than occupied by the pastor, the assessor may treat it as taxable property. He used his own Arret Armenian Congregational Church in Salem as an example: as the congregation shrank and no full‑time pastor lived in the parsonage, the town assessed roughly $4,000 a year on the parsonage, a burden for a small congregation.
The bill would allow a small religious organization to rent a parsonage or limited space in its main worship building for uses that raise funds for pastor pay, maintenance or church programs, while limiting the expansion of that allowance for larger religious organizations. Janigian said the draft intentionally uses language already present in statute — "standard religious programs" — and the drafting attorney used that phrase because it occurs elsewhere in the law.
Multiple municipal officials and the New Hampshire Municipal Association (NHMA) testified in opposition or identified practical issues. Brad Deshaies of NHMA told the committee the association opposes mandated expansions of tax exemptions that municipalities must absorb and noted uneven treatment across towns after a Board of Tax and Land Appeals (BTLA) ruling prompted stricter assessor practice statewide. He flagged vague terms like "standard religious programs" and the potential for inconsistent local administration, and said the proposal could create new reporting requirements for assessors and property owners.
Several representatives urged legislative services to review statutory language and applicable BTLA decisions and court precedent before moving the bill. Janigian and other supporters said they would welcome that research and that the bill attempts to help small, locally run congregations rather than large religious organizations.
What happens next: Committee members discussed whether municipal and county government committees should be consulted and asked Legislative Services or the Department of Revenue for legal guidance. No formal committee vote was recorded in the hearing record provided.
Context note: Testimony included statements about how assessors were applying RSA 72:23 after a BTLA decision (referenced in testimony as under RSA 71‑B:5) and reports of several towns revising assessments after appeals.
Ending: Committee members asked for follow‑up research from Legislative Services and urged the Department of Revenue Administration to provide guidance on statutory interpretation before the committee decides on reporting action.
