METHODIST CAMPS, INC., )
v. ) Appeal Nos. 03-49500 and 03-49501
PAUL E. JOHNSON, ASSESSOR, )
CEDAR COUNTY, MISSOURI, )
DECISION AND ORDER
Complainant presented sufficient and persuasive evidence to establish that the subject parcels have enlarged the Camp Galilee site and the added land and improvements are actively used for the horse riding program of Complainant=s Camp Galilee. Accordingly, the parcels qualify for exempt status.
Do the recently acquired subject parcels expand and serve the camp=s charitable purposes or are they used or held for other purposes?
Complainant filed appeals with the Commission on two properties identified by parcel numbers 90-3-5-22-10 and 90-3-5-21-1-1-24. The Board of Equalization decision letters reflect that the parcels were originally appraised by the Assessor=s office at $68,316 and $16,200, respectively. The parcels were classified as residential property and the indicated assessments were $12,980 and $3,080. Upon review by the Cedar County Board of Equalization, parcel # 90-3-5-22-10 was increased in appraised value to $112,300 for an indicated residential assessment of $21,340. Parcel # 90-3-5-21-1-1-24 was reclassified as agricultural property and decreased in value to $6,825 for an indicated agricultural assessment of $819.
Complainant appeals the subject assessments alleging that the subject parcels should be exempt. The parties were given an opportunity to conduct discovery and exchange and file exhibits and the written direct testimony of all witnesses.
Complainant filed the following exhibits and written direct testimony:
1. Exhibit A, Cedar County Board of Equalization Decision for 2003 for parcel number 90-3-5-21-1-1-24;
2. Exhibit B, Cedar County Board of Equalization Decision for 2003 for parcel number 90-3-5-22-10;
3. Exhibit C, Complaint for Review of Assessment;
4. Exhibit D, Acknowledgment Letter on parcel no. 90-3-5-22-10;
5. Exhibit E, Acknowledgment Letter on parcel no. 90-3-5-21-1-1-24;
6. Exhibit F, Warranty Deeds transferring title of subject parcels to Complainant;
7. Exhibit G, Application for Pro Forma Decree of Incorporation, Pro Forma Decree of Incorporation, Articles of Association;
8. Exhibit H, Certificate of Incorporation and Articles of Incorporation of Missouri United Methodist Camping and Retreat Ministries;
9. Exhibit I, Complainant=s Mission Statement;
10. Exhibit J, Cedar County Assessment Records for the subject parcels, Assessor=s notes from BOE meeting, BOE Schedule and minutes.
11. Written Direct Testimony of Mike Coffey.
Respondent did not submit any exhibits or testimony.
On April 29, 2004, Complainant filed a Motion for Summary Judgment Under 12 C.S.R. 30-3.050(4). These appeals have been assigned to Hearing Officer Aimee L. Smashey for hearing and decision. Complainant is represented by John D. Dunbar, Attorney. Respondent is represented by Michael L. Ash, Prosecuting Attorney for Cedar County.
FINDINGS OF FACT
1. Complainant, Methodist Camp, Inc. owns and operates Camp Galilee in Cedar County, Missouri. Written Direct Testimony of Mike Coffee, at 3. The original camp site has been and is currently exempt. Id. In 2001 and 2002, Complainant purchased two parcels which are adjacent to their original campsite. Id., and Complainant=s Exhibit F, at 1 and 4.
2. The original campsite is used for religious and physical education on a charitable basis. The recently acquired subject parcels are part of the same operation and are used to hold the horses used at the camp, for hay production, and a horse riding arena. The house and garage are used by the assistant manager of the camp as part of his employment. The barn has been remodeled for hay storage, a tack room and saddling stalls. The barn is also used to stable the horses which are injured and needing special care. Written Direct Testimony of Mike Coffey, at 4.
CONCLUSIONS OF LAW
1. Jurisdiction over this appeal is proper. Complainant timely appealed the Cedar County Board of Equalization=s decisions on the subject parcels= assessments to the State Tax Commission.
2. 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). AThe law disfavors claims for exemption from taxation. The substantial burden of establishing the property falls within the exempted class is on the person claiming exemptions under the referenced constitutional and statutory provisions. To prevent the curtailing of the purpose and intended scope of a tax exemption, the tax exemption statute is to be strictly but reasonably construed.@ Twitty v. State Tax Commission of Missouri, 896 S.W.2d 680, 684 (Mo. App. S.D. 1995) (citations omitted). Accordingly, 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).
3. Properties which can be exempted from taxation are set out within our State=s Constitution and the statutes enacted to enforce that Constitution. Our Constitution states:
…[A]ll 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 1994, 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.
4. In order for a property to be exempt from taxation for state, county or local purposes, the following requirements 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). ACharity@ is therein defined as A. . .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 Amust 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. AIt 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).
5. Complainant presented substantial and persuasive evidence that the subject parcels share the same ownership and operation as the exempt original camp site and the subject parcels are used for religious and physical education purposes.
Given the parties= agreement about the exempt status of the original Camp Galilee site, the dispute in this case is whether the recently acquired subject parcels expand and serve the camp or are used or held for other purposes.
Complainant=s Camp Galilee has been operated as a camp offering religious education and physical recreation for youth and adults. Its use has been accepted as a qualified use for exempt purposes. See, Conclusion of Law 4.1, supra. Mike Coffey, Site Director for the camp, established that newly acquired subject parcels are used as:
…the main base of operations for the horse riding program of Camp Galilee. Part of the camp activities include orientation to riding, safety information, riding within the confines of the riding arena and also riding in the pastures once the campers are qualified to do so. There are also certain periods of camp that are dedicated for horse riding activities. At these camps, participants spend approximately 8 hours per day with the horses, doing everything but feeding them.
Written Direct Testimony of Mike Coffey, at 4. Mr. Coffey further indicated that Camp Galilee uses these riding activities as A…an enticement for [their] religious education program. The horse riding activities are used to show the campers that the Christian life is joyous one and to get a chance for them to have a break from the intensity of worship, Bible Study, and small group time.@ Id.
The expanded provision of a horse riding program qualifies as an appropriate use under the Salvation Army definition in that it brings the participant=s hearts under the influence of education and religion.
The exempt status of the original Camp Galilee site (prior to the expansion in 2001 and 2002), indicates that there is no dispute concerning the nature of Complainant=s ownership, operation, or the element of public benefit. Accordingly, no further analysis is required under the Franciscan test.
This Hearing Officer is persuaded that Complainant presented sufficient evidence to establish a prima facie case that the subject parcels are used for the charitable provision of religious and physical education, are owned and operated on a charitable basis and serve an indefinite number of people providing a public benefit. Accordingly, the subject parcels are entitled to a property tax exemption.
The taxable status the subject parcels for 2003 tax years, as determined by the Assessor and approved by the Board of Equalization, is SET ASIDE. The Clerk is HEREBY ORDERED to show these parcels as exempt for the 2003 tax year.
A party may file with the Commission an application for review of a hearing officer decision within thirty (30) days of the mailing of such decision. The application shall contain specific detailed grounds upon which it is claimed the decision is erroneous.
If an application for review of a hearing officer decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of Cedar County as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
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 August 10, 2004.
STATE TAX COMMISSION OF MISSOURI