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Rain Tax Is a Tax, but Synagogue Is Not Exempted from Paying It

Shaarei Tfiloh Synagogue is one of Baltimore’s most recognizable and beloved religious buildings. Known as “the synagogue in the park,” it was constructed between 1921 and 1927. Most notable is its large copper dome which towers above a stone structure with stained glass windows on Auchentoroly Terrace, adjacent to Druid Hill Park.

Much less beloved is Section 4-201.1 of the Environmental Article of the Maryland Code, the statute that authorizes the imposition of a charge on property owners to provide funds for stormwater management and the protection of streams and wetlands (unaffectionately known as the “rain tax”).

Baltimore City implemented the rain tax by enacting a Stormwater Remediation Fee, based on the amount of impervious surface located on the property. Baltimore City Code, Article 27, §2-1 et seq.

A recent decision by the Circuit Court for Baltimore City, In the Matter of the Petition of Shaarei Tfiloh Congregation, Case No. 24-D-15-002026, held that Shaarei Tfiloh Congregation was obligated to pay the rain tax as adopted for Baltimore City.

In a well-reasoned opinion by Judge Lynn Stewart May, the court upheld determinations of the Department of Public Works and the Board of Municipal and Zoning Appeals (“BMZA”) that there was nothing in the law or the Maryland Declaration of Rights that exempted the Congregation from liability for payment.

As a preliminary matter, the court had to decide if the rain tax was a tax or a fee. The Congregation argued that it was a tax in the nature of a property tax, and that as a religious organization, it was exempt under §7-207 of the Real Property Article of the Maryland Code. The court ruled that the determination by BMZA that this was a fee was in error. However, this turned out to be of little comfort to the Congregation. Judge Mays ruled that this charge was in the nature of an excise tax, not a property tax. One of the hallmarks of a property tax is that it is based on the ownership of property. Also, property taxes are normally based on valuation. Here, the rain tax was based on the use of the property – more precisely, the amount of impervious surface. There is no exemption from excise taxes for religious institutions.

Next, the court rejected the Congregation’s argument that the law permitting the imposition of the rain tax constituted a land use regulation, and thus could not be imposed because of the federal Religious Land Use and Institutional Persons Act of 2000. That law forbids a land use regulation that imposes a substantial burden on the exercise of religion. However, the court found that the statute imposing the rain tax was not a land use regulation because it “does not limit or restrict a claimant’s use or development of land, it merely taxes the owner based on the impact the owner’s chosen use has on the City’s stormwater management program.”

Finally, the Court affirmed BMZA’s finding that Article 27 of the City Code violated the Free Exercise (of religion) Clause of the Maryland Declaration of Rights.

Despite a creative effort by its counsel, the Congregation will have to pay the rain tax unless and until it is repealed or the decision of the Circuit Court for Baltimore City is appealed and reversed.

For questions, contact Searle Mitnick (410) 576-4107.


March 13, 2016




Mitnick, Searle E.


Real Estate