Religious Freedom Victory for Iowa Church

MARION, IA – An Iowa administrative law judge recently rejected a “frivolous” petition from a group of Iowa taxpayers to revoke the tax-exempt status on two properties owned by Calvary Chapel Iowa, which included a home provided to the church’s pastor. Liberty Counsel, in partnership with the Kirkwood Institute, defended Calvary Chapel Iowa securing the judge’s dismissal of the petition that keeps the church’s tax exemptions in place. The judge said Iowa’s recently enacted Religious Freedom Restoration Act (RFRA) protected the church from having to prove its tax exemption entitlements to individuals not involved in enforcing state tax law.

In October 2023, the church’s pastor spoke out publicly against the sexualization of children, held a book reading of “Jesus and My Gender” in response to drag queen story time, and endorsed school board candidates on his personal social media. Then in November, several Iowa taxpayers petitioned against the church’s tax exemptions. One of the petitioners, Dustin Brooks, of Marion, serves on a local diversity and equity committee and is committee chairman for a school board candidate the pastor did not support. Brooks essentially stated that the church getting involved in politics while not paying taxes had “lit [his] fire a little bit.”

The retaliatory and baseless petition sought to revoke two property tax exemptions for which Calvary Chapel Iowa is the owner of record – a recently constructed home where the pastor and his wife and three children reside, and a portion of the church’s campus in Cedar Rapids, Iowa used for a Christian daycare and school. The petitioners argued these properties were not being use “solely” for religious purposes because the pastor’s family are “non-ecclesiastical personnel” residing in the home and due to the daycare taking in revenue.

Liberty Counsel and the Kirkwood Institute argued in the motion to dismiss brief that these claims were “frivolous” since the state had already approved the exemptions and that the church having to defend against this type of “spurious” challenge burdens the Free Exercise of Religion. A church’s tax exemptions are not nullified because pastors have families who live with them or because Christian daycares have employees and operating costs.

The brief stated, “A complaint that the ‘parsonage exemption’ is destroyed by a pastor’s wife and children living in the home is frivolous on its face…Moreover, the Petition on its face admits that the ‘Preschool’ & Daycare is ‘educational’ as well as ‘religious,’ thus bringing the Preschool & Daycare doubly within the fold of an exemption under Iowa [law].”

The brief continued, “Calvary Chapel has a fundamental First Amendment right…to engage in protected speech…In short, [the petitioners] want the Church…to ‘sit down, and shut up,’…making their play against the Church and [its pastor] by going after property tax exemptions that were appropriately recognized by the relevant authorities.”

According to Iowa’s RFRA, the state cannot substantially burden the exercise of religion without a compelling government interest of “the highest order.” Liberty Counsel and Kirkwood Institute argued the petition “cannot survive” Iowa’s RFRA law because these challenges could potentially chill expression and hamper the church’s ability to exercise its religious functions for its members.

Administrative Law Judge Jonathan Gallagher stated “this type of litigation imposes a substantial burden on the exercise of religion” especially when the state’s Department of Revenue already enforces tax laws.

Judge Gallagher wrote, “To hold otherwise would be to allow the unaccountable political opponents of a church the option to use the power of the State to target and/or retaliate against the religious organization for the organization’s activities, thereby creating a chilling effect not only on that specific religious group but also all other similarly oriented religious organizations. This is precisely the type of religious interference that RFRA was designed to prevent, and until the judiciary provides different guidance on the scope of RFRA, this case must be dismissed.”

The petitioners have 30 days to appeal the judge’s decision before it becomes final.

Liberty Counsel Founder and Chairman Mat Staver said, “Religious freedom laws protect churches and pastors so they can focus on their mission rather than defending against spurious challenges from those who politically disagree with them. The power to tax is not intended to empower censorship. We are pleased Judge Gallagher properly applied Iowa RFRA in dismissing this attempt to punish religious and political speech. Frivolous claims brought against a church in Iowa courts also run the risk of being financially costly to any of the petitioners for attorney’s fees and costs.”