Kanakuk Ministries v. Chuck Pennel, Taney County Assessor

August 18th, 2014

State Tax Commission of Missouri

-vs- ) Appeal No. 13-89510
  )            thru 13-89517





Decision of the County Board of Equalization sustaining the assessments 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 Virginia L. Fry, Esq.

Respondent is not represented by counsel.

This case is decided by Senior Hearing Officer, Luann Johnson, based upon exhibits provided by Complainant. Respondent presented no exhibits.


A Restate Articles of Incorporation filed by Kanakuk Ministries on March 24, 2003
B Letter Kanakuk Ministries received from the Internal Revenue Service confirming exemption from federal income tax
C July 2009 letter Kanakuk Ministries received from the Missouri Department of Revenue approving its application for sales tax exemption
D Taney County Board of Equalization decisions
E, F & G Taney County Collector’s Statement of Non-Assessment
H Map outlining the appealed parcels
I Key describing parcels outlined in Exhibit H
J Personal Property Locator No. 3250
K Daily activities of Kanakuk Ministries’ Christian Summer camps for children
L Daily activities of Kanakuk Ministries’ Christian summer camp for families
M Sample of guides and curriculum used in the camps
N Education Brochures describing each camp
O Link Year Program information
P Written Direct Testimony of Donald C. Frank, Director of Corporate Legal Affairs



Complainant appeals, on the grounds of exemption, the decisions of the Taney County Board of Equalization, which sustained the Assessor’s valuation of the subject properties. The Commission takes these appeals 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.


  1.          Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decisionss of the Taney County Board of Equalization.
  2. 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 (Ex. B). In the event of dissolution, the assets of Complainant must go to another 501(c) (3) organization. (Ex. A).
  3. Complainant’s Purpose and Operation. Complainant’s stated purposes are:
  • To relieve poverty by providing food, clothing, medical supplies, and other basic needs to underprivileged or impoverished children;
  • To advance the Kingdom of God and promote Christian virtue in individuals by providing support for Christian evangelistic organizations and programs;
  • To educate children and advance the Kingdom of God by operating camps to teach Christian faith and athletic skills;
  • To assist other religious, charitable, and educational organizations in the conduct of similar activities; and
  • To engage in any and all lawful activities to accomplish the foregoing purposes . .

(Ex. A).

The camp provides worship services, devotionals, bible studies and activities for all ages of children through young adults, for families and for staff members (Exhibits K-O).   Activities are designed to allow participants to put Christian principles into practice in social settings and real life applications (Ex. P).

In 2012, Complainant provided $1,300,000 in scholarships to 1,900 underprivileged children. In 2013, Complainant provided $1,670,000 in scholarships to 2,400 underprivileged children. Of the 2013 scholarships, $425,000 went to 342 underprivileged children in Taney and Stone counties (Ex. P, pg. 10).

  1. Identification of Subject Property.
  • Appeal No. 13-89510, Parcel No. 08-9.0-33-001-004-004.000: This is a 7.8 acre tract owned by Complainant. The site is improved with housing facilities for families, students and staff, a dining hall, a chapel, an activities building/meeting hall, an administrative office, maintenance buildings, a covered assembly area, and two swimming pools.
  • Appeal No. 13-89511, Parcel No. 08-8.0-33-001-005-001.000: This parcel consists of improvements only on a leased parcel. The improvements on this parcel consist of additional staff housing facilities used in the family camp.
  • Appeal No. 13-89512, Parcel No. 08-8.0-28-000-000-049.000: This parcel consists of improvements only on a leased parcel. The improvements on this parcel consist of facilities for campers and staff, a dining hall, administrative office buildings, maintenance building, a covered assembly area, and two swimming pools.
  • Appeal No. 13-89513, Parcel No. 08-8.0-28-000-000-050.000: This parcel consists of improvements only on leased land. The improvements consist of an activities building and an historical cabin built in 1927.
  • Appeal No. 13-89514, Parcel No. 08-8.0-33-001-003-002.000. This parcel includes improvements only on leased land. The improvements on this parcel are additional housing facilities for campers and staff.
  • Appeal No. 13-89515, Parcel No. 08-8.0-33.001-003-001.000: This parcel consists of improvements only on leased land. The improvements on this parcel are housing facilities for campers and staff, a dining hall, a meeting hall, and one swimming pool.
  • Appeal No. 13-89516, Parcel No. 08-8.0-33-001-002-001.000: This parcel includes improvements only on leased land. The improvements consist of administrative offices and the main chapel.
  • Appeal No. 13-89517, Parcel No. 32850: This parcel includes all the motor vehicles, watercraft and various trailers used in the operation and administration of the summer camps and other ministry programs.
  1. Previous Exempt Status. The Taney County Board of Equalization has historically found this property to be exempt. While exempt status may change based upon use, there is no evidence that the use of the property changed between January 1, 2012 and January 1, 2013.


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:

1. 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.

2. 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).

3. 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, in this case renting (housing), 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).


            Complainant has demonstrated an exempt use for the subject properties. The properties are owned and operated on a not-for-profit religious basis to benefit an indefinite number of people by modeling Christian behavior, deepening an individual’s relationship with God, strengthening Christian family bonds, and developing Christian leaders.



The taxable status for the subject properties as determined by the Assessor and sustained by the Board of Equalization for Taney County for the subject tax day are SET ASIDE. The Clerk is hereby ORDERED to change the taxable status to “exempt” for tax year 2013. Market value and classification were not appealed and are not determined by this decision.

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 Taney 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 18th day of August, 2014.



Luann Johnson

Senior Hearing Officer




 Certificate of Service

I hereby certify that a copy of the foregoing has been mailed postage prepaid this 18th day of August, 2014, to: Virginia Fry, 901 St. Louis St., #1800, Springfield, MO 65806, Attorney for Complainant; Chuck Pennel Taney County Assessor P.O. Box 612 Forsyth, MO 65653; Donna Neeley Taney County Clerk, P.O. Box 156 Forsyth, MO 65653; Sheila Wyatt Taney County Collector, P.O. Box 278, Forsyth, MO 65653.


Jacklyn Wood

Legal Coordinator