A bill for an act relating to the definition of a religious institution or society for purposes of property taxation and including applicability provisions.

2025-2026 Regular Session

Expands which entities qualify for Iowa property tax exemption for religious institutions to include churches, church associations, and primarily religious Chapter 504 nonprofits s

Committee report approving bill, renumbered as HF 2789.

#propertytaxes #religiousorganizations #taxexemptions #taxation #nonprofitentities

Basic purpose

HSB 779 proposes to broaden the statutory definition of “religious institution or society” for property taxation purposes. The intended effect is to expand which organizational entities can qualify for property tax exemption by explicitly including additional forms of religious organizations under the exemption framework.

Key provisions and changes

New definition addition (Section 1)
The bill adds a new paragraph to Iowa Code 427.1(8), defining “religious institution or society” to include, and not be limited to:

(1) A church or other house of worship.
(2) A convention or association of churches or other houses of worship.
(3) A religious nonprofit corporation organized under Code chapter 504 that is operated primarily for religious purposes, regardless of whether it is integrated or affiliated with a church or other house of worship.

Scope of entities covered
The enumeration expressly covers:

Churches and houses of worship
Conventions or associations of churches/households of worship
Religious nonprofit corporations organized under Chapter 504, with emphasis on primary religious purpose

Applicability and timing (Section 2)
The bill applies to assessment years beginning on or after January 1, 2027. In other words, its tax-exemption framework would take effect for the 2027 assessment year and onward.

Who/what is affected

Religious organizations seeking property tax exemption that fall into the now-expanded categories:

Churches and worship facilities
Federations, conventions, or associations of churches or houses of worship
Religious nonprofit corporations organized under Chapter 504 (Iowa law), provided they are primarily for religious purposes (even if not formally integrated with a local church house of worship)

Tax administration and exemptions processes for property owned by these entities, since they would be subject to the same exemption framework delineated by the statute for religious institutions or societies.

Procedural and timeline notes

Introduction and referral: Introduced April 20, 2026, referred to Ways and Means (Judiciary and fiscal committee process to follow).

Effective date: New definitions and applicability apply to assessment years beginning on or after January 1, 2027.

Explanatory statement: The bill includes an explanatory note clarifying current law and the bill’s intended interpretation, but it does not constitute legislative agreement with the statement.

Potential impact considerations

The expansion could increase the number of entities eligible for property tax exemption status if they fit the expanded categories (especially Chapter 504 religious nonprofit corporations).

Local assessors and tax officials may need to adjust eligibility determinations and documentation requirements to align with the broadened definitions starting with the 2027 assessment year.

Tax revenue implications at the local level could arise if more properties qualify for exemption; conversely, the bill clarifies and potentially standardizes categories of religious entities that qualify.

If you’d like, I can compare this proposal to current Iowa exemptions or draft a plain-language fact sheet for affected organizations.

Bill