If a Mississippi church owns property but uses it primarily as a school, does the property still qualify for ad valorem (property) tax exemption?

Plain-English summary

Leflore County's attorney asked the AG to walk through how the property tax exemption in Mississippi Code § 27-31-1 applies when a church owns land that is used mostly to run a school. The opinion's takeaway: there is no single bright-line rule, because Section 27-31-1(d) actually contains two different exemptions that might apply, and the board of supervisors has to make a factual determination.

The first exemption covers property "belonging to any religious society, or ecclesiastical body, or any congregation thereof, or to any charitable society," but only if the property is "used exclusively for such society or association and not for profit." The second exemption covers any property "belonging to an individual, institution or corporation and used for the operation of a grammar school, junior high school, high school or military school" without an "exclusive use" requirement.

Whether a particular property qualifies depends on how it is actually being used, not just on who owns it or whether the owner is tax-exempt under 26 U.S.C. § 501(c)(3). Rental payments and dual religious-and-educational use are relevant in different ways depending on which exemption is being claimed. The board of supervisors makes the call.

What this means for you

If you are a church administrator or pastor with a school on church property

You probably qualify for one of the exemptions, but which one matters. Walk through these questions:

1. Is the school operated for profit? If yes, the religious-society exemption is gone (it requires "not for profit"). The school exemption may still work because it does not have a "not for profit" condition in the same way.
2. Is the property used "exclusively" for the church and its activities? If the school is a separate nonprofit, that complicates the religious-society exemption. The school exemption is more forgiving on the "exclusive" point.
3. Does the school pay rent to the church? Rent does not automatically defeat exemption, but the board of supervisors will want to see that payments are not so large or so structured that the church is in effect operating a real estate business.
4. Does the school qualify (grammar, junior high, high, or military)? Pre-K, daycare, college, vocational, and adult-education programs are not on the statutory list. If the operation is a kindergarten-through-12 school, you fit. If it is something else, the school exemption is unlikely to apply.

The opinion expressly warns that 501(c)(3) status alone is not enough. Have records ready showing the actual use and any rental terms.

If you are a county supervisor or tax assessor

The exemption decision is your call. The opinion is direct: "an exemption determination is a factual one to be made by the board of supervisors." The framework is:

• Identify which exemption is being claimed (religious-society/charitable in § 27-31-1(d) versus the school exemption in the same subsection).
• For the religious-society exemption, examine whether the use is truly "exclusive" and "not for profit." Mixed religious-and-school use can still qualify if the school is a ministry of the church and the activities serve the religious society. But if a separate corporation operates the school, look closely.
• For the school exemption, the use can be broader (the statute does not require exclusive use). The key fact is that the property is used "for the operation of" the school.
• Rental payments are not automatically disqualifying, but they can shift a use from "not for profit" to a profit-making lease arrangement. Document what you find.
• Strict construction applies. The Mississippi Supreme Court's 1920 Currie-Finch decision still controls: a taxpayer must come "strictly within the statute" to qualify.

If you are an attorney advising a religious nonprofit

This opinion strongly suggests you should claim the school exemption (the second prong of § 27-31-1(d)) when the property is primarily used for K-12 education, and only fall back to the religious-society/charitable exemption if you cannot meet the school criteria. The school exemption avoids the "exclusive use" trap that can be triggered by mixed religious-and-school use or by separate corporate ownership of the school.

Document carefully:

• The owner of the property (deeds, title work).
• The actual use across the calendar year (a use schedule helps).
• Lease or use agreements between the church and the school.
• Whether the school is a registered private school under state regulations.

If you are a Mississippi taxpayer concerned about exemptions in your county

The opinion is a reminder that exemptions are not automatic and the county has to make a factual determination on the record. If you think a property in your county is improperly exempt, the formal process is to bring it before the board of supervisors during equalization or to appeal an assessment. The exemption rests on actual use, not just on the owner's name on the deed or its 501(c)(3) status.

Common questions

Q: Our church owns the building and the school operates as a separate nonprofit. Can we get the religious exemption?
A: It is harder. The religious-society exemption requires the property be "used exclusively for such society or association." If a separate nonprofit operates the school, the use is not "exclusively" for the religious society. You probably want to claim the school exemption instead, which has no "exclusive use" requirement.

Q: Does it matter that we are a 501(c)(3)?
A: Not by itself. The opinion quotes its earlier 1999 McWilliams opinion: "receipt of a 501(c)(3) tax exemption alone does not qualify an entity to be exempt from ad valorem taxation." Federal income-tax status and Mississippi property-tax status are different questions.

Q: We charge tuition. Can the property still be exempt?
A: Tuition does not by itself defeat the school exemption. The school exemption simply asks whether the property is "used for the operation of" the school. Charging tuition is consistent with operating a school. Whether tuition is so high or the structure is so commercialized that the operation amounts to a for-profit business is a factual question.

Q: We have a daycare and pre-K on the property. Are those covered?
A: Probably not under the school exemption, which is limited to "grammar school, junior high school, high school or military school." Daycare and pre-K are not on that list. The religious-society exemption may still apply if the daycare is a ministry of the church and the property is used "exclusively" for the church and "not for profit."

Q: We rent the property to the school for $1 a year. Is that a problem?
A: A nominal rent that is essentially a documentation device for the use arrangement is unlikely to convert the church's holding into a "for profit" use. A market-rate rent could. The board of supervisors will look at the substance.

Q: What if part of the property is used for church services on weekends and the school during the week?
A: That is exactly the dual-use scenario the opinion flags. Some exemptions require "exclusive use" and some do not. For a church-and-K12 dual-use building, the school exemption (no exclusive-use requirement) is usually the safer claim.

Background and statutory framework

Section 27-31-1 is Mississippi's master list of property tax exemptions. Subsection (d) covers two distinct categories that frequently overlap in practice:

1. Property of religious, charitable, historical, patriotic, or garden/pilgrimage societies. This exemption requires the property be "used exclusively for such society or association and not for profit" and is bounded by the acreage limits in § 79-11-33.
2. Property used to operate a school. "All property, real or personal, belonging to an individual, institution or corporation and used for the operation of a grammar school, junior high school, high school or military school." This exemption has no "exclusive use" or "not for profit" qualifier in its plain text.

Under Currie-Finch Brick & Lumber Co. v. Miller (Miss. 1920), tax exemptions are construed strictly: "the party must come strictly within the statute allowing the exemption to obtain an exemption." That has been consistently followed in modern AG opinions, including the October 2022 McWilliams opinion the AG cites here, which observed that for charitable-society property "rather than the owner of the property, [i]t is the property itself which is either taxed or exempt from taxation . . . and any exemption depends on the property's exclusive, non-profit use."

The procedural piece is also important. Mississippi AG opinions are limited by § 7-5-25 to "prospective questions of state law only," which is why the opinion repeatedly punts the factual application to the local board of supervisors. Whether a particular church-owned-school-used parcel qualifies is a determination of fact for the local body, not the AG.

Citations and references

Statutes:
- Miss. Code Ann. § 27-31-1 (property tax exemptions)
- Miss. Code Ann. § 27-31-1(d) (religious, charitable, and school exemptions)
- Miss. Code Ann. § 79-11-33 (acreage limits)
- Miss. Code Ann. § 7-5-25 (AG opinion authority)

Cases:
- Currie-Finch Brick & Lumber Co. v. Miller, 86 So. 579 (Miss. 1920) (strict construction of exemptions)

Prior AG opinions:
- MS AG Op., Andrews (Dec. 17, 1999)
- MS AG Op., McWilliams (Dec. 28, 1999) (501(c)(3) status alone insufficient)
- MS AG Op., McWilliams (Oct. 21, 2022) (use, not ownership, drives exemption)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2026/04/K.-Pulley-April-08-2026-Ad-Valorem-Tax-Exemption-Church-Owned-Property-Used-for-School.pdf

Original opinion text

April 8, 2026

Kelvin Pulley, Esq.
Attorney, Leflore County Board of Supervisors
104 Cotton Street
Greenwood, Mississippi 38930

Re: Ad Valorem Tax Exemption; Church-Owned Property Used for School

Dear Mr. Pulley:

The Office of the Attorney General has received your request for an official opinion.

Questions Presented

1. Does property owned by a religious organization, but used primarily for the operation of a school, qualify for exemption under Mississippi Code Annotated Section 27-31-1?

2. Is eligibility for exemption determined primarily by ownership of the property, the use of the property, or a combination of both?

3. Does the exemption apply if the school is operated as a nonprofit entity but the property remains titled in the name of the church?

4. Is the exemption affected if the church receives rental payments from the school, and if so, does the nature or amount of such payments alter the exemption analysis?

5. Does mixed or dual use of property (religious and educational) impact eligibility for exemption and how such determinations should be made by the board of supervisors?

Brief Response

1. Whether property qualifies for tax exemption under Section 27-31-1 is a fact determination to be made by the board of supervisors.

2. Whether the property's ownership or use determines eligibility is dependent upon the exemption being sought under Section 27-31-1. See Currie-Finch Brick & Lumber Co. v. Miller, 86 So. 579, 579 (Miss. 1920) ("[T]he party must come strictly within the statute allowing the exemption to obtain an exemption.").

3. Please see responses to questions one and two. Additionally, "receipt of a 501(c)(3) tax exemption alone does not qualify an entity to be exempt from ad valorem taxation." MS AG Op., McWilliams at *1 (Dec. 28, 1999).

4. Whether the exemption is affected if the church receives rental payments from the school is dependent upon the exemption being sought under Section 27-31-1.

5. Whether mixed or dual use impacts exemption eligibility is dependent upon the exemption being sought under Section 27-31-1. While some exemptions require exclusive use, others do not.

Applicable Law and Discussion

Section 27-31-1 exempts certain property from taxation and provides in relevant part:

The following shall be exempt from taxation:
...
(d) All property, real or personal, belonging to any religious society, or ecclesiastical body, or any congregation thereof, or to any charitable society, or to any historical or patriotic association or society, or to any garden or pilgrimage club or association and used exclusively for such society or association and not for profit; not exceeding, however, the amount of land which such association or society may own as provided in Section 79-11-33. . . . All property, real or personal, belonging to an individual, institution or corporation and used for the operation of a grammar school, junior high school, high school or military school.

(emphasis added).

You first ask if property owned by a religious organization, but used primarily for the operation of a school, qualifies for exemption. We have consistently opined that an exemption determination is a factual one to be made by the board of supervisors. See, e.g., MS AG Op., Andrews at 1 (Dec. 17, 1999); MS AG Op., McWilliams at 3 (Oct. 21, 2022); see also Miss. Code Ann. § 7-5-25 (authorizing the Attorney General to issue opinions on prospective questions of state law only). This continues to be the opinion of this office.

You next ask if eligibility for exemption is determined primarily by ownership of the property, the use of the property, or a combination of both. This is dependent upon the statutory language setting forth the exemption being sought under Section 27-31-1. See Currie-Finch Brick & Lumber Co., 86 So. at 579 ("[T]he party must come strictly within the statute allowing the exemption to obtain an exemption."). This said, in most instances, including those that appear to be potentially applicable here, eligibility is ultimately dependent upon the property's use. See, e.g., MS AG Op., McWilliams at *3 (Oct. 21, 2022) (regarding property of charitable society and providing "rather than the owner of the property, [i]t is the property itself which is either taxed or exempt from taxation . . . and any exemption depends on the property's exclusive, non-profit use") (internal quotations and citation omitted); see also Miss. Code Ann. § 27-31-1(d) (providing exemption for property owned by an individual, institution, or corporation to be "used for the operation of a grammar school, junior high school, high school or military school" (emphasis added)).

Regarding your third question, "receipt of a 501(c)(3) tax exemption alone does not qualify an entity to be exempt from ad valorem taxation." MS AG Op., McWilliams at *1 (Dec. 28, 1999). Pursuant to Section 27-31-1(d), property belonging to a religious or charitable society must be "used exclusively for such society or association and not for profit." Exclusive use is a factual determination to be made by the board of supervisors.

Regarding your fourth and fifth questions, the relevance of rental payment or dual use are dependent upon the exemption being sought under Section 27-31-1(d). As stated supra, an exemption for property "belonging to any religious society, or ecclesiastical body, or any congregation thereof, or to any charitable society" requires property to be "used exclusively for such society or association and not for profit." However, there is also a separate exemption available for "[a]ll property, real or personal, belonging to an individual, institution or corporation and used for the operation of a grammar school, junior high school, high school or military school." Miss. Code Ann. § 27-31-1(d). As shown, this exemption does not require the same "exclusive use."

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Maggie Kate Bobo
Maggie Kate Bobo
Special Assistant Attorney General