State Tax Commission of Missouri
| CIRCLE OF LIGHT CHURCH | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| v. | ) | Appeal Number 13-15003 |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST. LOUIS COUNTY, MISSOURI | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
Decision of the County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE. Complainant presents substantial and persuasive evidence demonstrating the property should be exempt from taxation for tax year 2013.
Complainant represented by Denyse Jones, Esq. and Carrie Hermeling, Esq.
Respondent represented by Stephanie Hill, Assistant County Counselor.
An evidentiary hearing was held on May 7, 2015. The case is decided by Senior Hearing Officer, Luann Johnson.
EXHIBITS
Complainant presented the following exhibits:
- Amended and Restated Petition for Exemption of Real and Personal Property filed with the St. Louis County Board of Equalization
- 2002 Real Property Tax Exemption from City of St. Louis for Complainant
- Written Direct Testimony of Reverend Jeff Johnson Jr.
- Written Direct Testimony of Ben Ledbetter
Respondent presented the following exhibits:
- Written Direct Testimony of Boris Frumson
- Written Direct Testimony of Jeffrey Hall
- Written Direct Testimony of Charles White
- Written Direct Testimony of Joseph Craven
ISSUE
Complainant appeals, on the grounds of exemption, the decision of the St. Louis County Board of Equalization, which sustained the Assessor’s valuation of the subject property. The Commission takes this appeal to determine whether or not the property should be exempt from taxation for tax year 2013.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
- Characteristics of Complainant. Complainant is a Missouri Not-For-Profit Corporation formed under Chapter 355 of the Revised Statutes of Missouri. It is recognized by the Internal Revenue Service as tax exempt under Section 501(c) (3) of the Internal Revenue Code. In the event of dissolution, the assets of Complainant must go to another 501(c) (3) organization. Complainant’s property is dedicated unconditionally to the charitable activity in such a way that there will be no profit, presently or prospectively, to individuals or corporations.
The subject property is owned by Circle of Light Church but is operated by Circle of Light Associates, a related not-for-profit corporation. The Board of Directors of Circle of Light Associates is governed by the church deacon board.
- Complainant’s Purpose and Operation. The purpose of the church “is to gather in community those who desire to worship God and respond, individually and collectively, to God’s purposes for their lives, as made manifest in the Holy Scripture and in the life, teachings, death, resurrection, and living presence of Jesus Christ.” Complainant’s by-laws further state, “The Circle of Light Associates, Inc. – COLA, is an official church-related organization.”
The stated purpose of Circle of Light Associates is “exclusively for charitable, educational, religious, or scientific purposes within the meaning of section 501(c)(3) of the Internal Revenue Code.”
Donations for the use of the subject facility and food provided at the subject facility are accepted. Income is routed through the church and the church covers any shortfall in the operations of the facility. For tax year 2012, the banquet hall generated income of $187,618. Expenses were $213,132. Similar revenue shortfalls were experienced in tax year 2011.
- Identification of Subject Property. The subject property is identified by parcel number 10E440170. It is further identified as 10832 Bellefontaine Road, St. Louis, St. Louis County, Missouri.
- Description of Subject Property. The subject property is a commercial building operating as a restaurant, banquet facility, (Down Home Elegance Banquet Hall), meeting rooms and garden area. Complainant uses this property for religious, charitable and educational purposes including growing food, providing storage for a food pantry, providing meals for senior citizens and meals for community outreach to needy individuals; catering for funeral repasts and weddings, counseling services, teen ministry programs, continuing education, court-mandated anger management, drug and alcohol abuse programs and juvenile programs; culinary and nutrition programs, bible study and prayer services.
Burden of Proof
Although a taxing statute is construed strictly against the state, an exemption statute is strictly construed against the one claiming the exemption. State ex rel. Union Electric Co. v. Goldberg, 578 S.W.2d 921, 923 (Mo. banc 1979).
In order to prevail, Complainant must demonstrate by substantial and persuasive evidence, that it is entitled to an exemption.
Substantial evidence is that evidence which, if true, has probative force upon the issues, i.e., evidence favoring facts which are such that reasonable men may differ as to whether it established them, and from which the Commission can reasonably decide an appeal on the factual issues. Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
Statutory Exemptions
Properties which can be exempted from taxation are set out within our Constitution and the statutes enacted to enforce that Constitution, to wit:
“. . .all property, real and personal, not held for private or corporate profit and used exclusively for religious worship, for schools and colleges, for purposes purely charitable, . . .may be exempt from taxation by general law but any such law may provide for approximate restitution to the respective political subdivisions of revenues lost by reason of the exemption. All laws exempting from taxation property other than the property enumerated in this article, shall be void. Article X, Section 6, Mo. Const. of 1945.
In support of this Constitutional provision, the Legislature has enacted Section 137.110, RSMo, which provides in relevant part:
The following property shall be exempt from taxation:
(5) All property, real and personal, actually and regularly used exclusively for religious worship, for schools and colleges, or for purposes purely charitable and not held for private or corporate profit, except that the exemption herein granted does not include real property not actually used or occupied for the purpose of the organization but held or used as investment even though the income or rentals received therefrom is used wholly for religious, education or charitable purposes; Section 137.110, RSMo 1994.
Case Law on Charitable Use
In order for a property to be exempt from taxation for state, county or local purposes, the following tests must be met:
- The property must be actually and regularly used exclusively for a charitable purpose, as charity is defined by Salvation Army v. Hoehn, 188 S.W.2d 826 (Mo. banc 1945). “Charity” is therein defined as “. . .a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their hearts under the influence of education or religion, by relieving their bodies of disease, suffering or constraint, by assisting them to establish themselves for life, or by erecting or maintaining the public buildings or works or otherwise lessening the burdens of government.” Salvation Army at 830.
- The property must be owned and operated on a not-for-profit basis. The property “must be dedicated unconditionally to the charitable activity in such a way that there will be no profit, presently or prospectively, to individuals or corporations. Any gain achieved in use of the building must be devoted to achievement of the charitable objectives of the project.” Franciscan Tertiary Province v. State Tax Commission, 566 S.W.2d 213, at 224 (Mo. banc 1978).
- The dominant use of the property must be for the benefit of an indefinite number of persons and must directly or indirectly benefit society generally. “It is required that there be the element of direct or indirect benefit to society in addition to and as a result of the benefit conferred on the persons directly served by the humanitarian activity.” Franciscan at 224. See also, Barnes Hospital v. Leggett, 589 S.W.2d 241 (Mo. banc 1979).
In Missouri law, “used exclusively” has reference “to the primary and inherent use as over against a mere secondary and incidental use.” If the incidental use does not interrupt the exclusive occupation of the (premises) for religious worship, but dovetails into or rounds out that purpose, then it can be said that the property has an exclusive use which authorizes the exemption. Central States Christian Endeavors Ass’n v. Nelson, 898 S.W.2d 547, 549 (Mo. banc 1995).
DECISION
Complainant has demonstrated an exempt use for the subject property. The property is owned and operated on a not-for-profit basis to benefit an indefinite number of people.
ORDER
The taxable status for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE. The Clerk is hereby ORDERED to change the taxable status to “exempt” for tax year 2013.
Application for Review
A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo
Disputed Taxes
The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8, RSMo.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED this 8th day of June, 2015.
STATE TAX COMMISSION
Luann Johnson
Senior Hearing Officer
816-678-6936
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 8th day of June, 2015, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.
Jacklyn Wood
Legal Coordinator