Scientology Church Owes Hollywood Back Taxes

Los Angeles Independent/July 16, 2003
By Kevin Butler

The Church of Scientology has failed to pay more than $94,000 in property taxes for the last fiscal year on four of its Hollywood properties, marking the second time in recent years that the religious group has had an outsize tax delinquency.

The church, one of the largest property owners in Hollywood, owes $94,625 for the fiscal year that ended June 30 on four properties, including $41,227 to the local Business Improvement District (BID).

The Church of Scientology expects to pay the taxes this year, but has not done so yet because other financial priorities must first be taken care of, said Linda Simmons Hight, church spokeswoman.

"It’s a question of priorities," she said. "You know, we have an enormous amount of community activity in Hollywood, and we’ll always put the funds there first. It’s strictly a question of priorities. It’s not a protest or anything like that."

This marks the second time in recent years that the church has been late on a large sum of taxes. Last year, The Independent reported that the church owed back taxes in the millions of dollars and was in danger of having at least one of its properties, at Hollywood Boulevard and McCadden Place, seized by the county.

The church recently paid off those back taxes. But now it once again is in arrears, having failed to pay taxes for the fiscal year spanning July 1, 2002 to June 30, 2003.

The local BID was counting on receiving those assessments from the church to help fund its security services, trash cleanup and graffiti removal, said Kerry Morrison, executive director of the Hollywood Entertainment District.

The failure to pay the taxes "really caught the [district] by surprise, because our budget this year was predicated upon their full participation in the [district]," she said.

"So it forced us at our June meeting to make some emergency decisions to scale our budget back in anticipation of not receiving their $40,000 this year," she added.

Hight says the church is not in the habit of being late on its property taxes. Last year, when it owed millions, the church decided not to pay because it was still seeking tax exemptions from the county.

"That was a completely different set of circumstances," she said. "At that time, we were in negotiations, long-term discussion, with the county tax collector in establishing [tax] exempt and non-exempt portions of each of our properties."

Hight says the church will pay all taxes but adds that it doesn’t believe nonprofits should be obligated to pay into the BID because they already contribute to the community.

"Each of us has already a mission and a mandate that includes tremendous contributions to the community," she said. "And to then be assessed from the ... BID is just not correct."

But other property owners disagree.

Non-profits benefit just as much from district services, such as street cleaning and security, as for-profit groups do, says Sheila Holincheck, general manager of 6253 Hollywood and Vine, formerly known as the Hollywood Equitable Building.

"All those services are still received no matter if you are making a lot of money or [are] a non-profit," she said.

In response to non-profits’ concerns, the Hollywood Entertainment District will give nonprofits a credit of up to $1,000 per square-ft. on their property assessments starting next year, Morrison said.

The church’s 6724 Hollywood Blvd. property was mistakenly assessed at a higher rate, she said.

Church officials have asked the district to give them a future credit on taxes owed, and so for the next few years, the church will owe the district nothing on that property, she added.

The church, whose members include several celebrities, owes about $31,200 in total taxes on its 6331 Hollywood Blvd. property, $41,700 on its 6349 Hollywood Blvd. property, $4,800 on its 1715 Ivar Street property and $16,700 on its 6724 Hollywood Blvd. property.