State Tax Commission of Missouri
| NATIONAL INSTITUTE OF MARRIAGE ) | |
| ) | |
| Complainant ) | |
| -vs- ) | Appeal No. 13-89540 |
| ) | |
| CHUCK PENNEL, ASSESSOR, ) | |
| TANEY 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 Craig A. Overstreet, Esq.
Respondent represented by William McCullah, Esq., Special County Counselor.
By agreement of the parties, the case is decided by Senior Hearing Officer, Luann Johnson, based upon exhibits provided by Complainant. Respondent presented no exhibits.
COMPLAINANT’S EXHIBITS
| A | Affidavit of Inez Miller-Gibbs on behalf of Complainant |
| B | Articles of Incorporation of Smalley Marriage Institute |
| C | Articles of Amendment for Nonprofit Corporation changing name to National Institute of Marriage |
| D | IRS 5-1(c) 3 Exemption Letter |
| E | Cover Letter from opposing counsel and answers to Complainant’s Discovery Requests by Respondent |
| F | Missouri Annual Registration Reports for Nonprofit Corporations by National Institute of Marriage for years 2011-2013 |
| G | Written Direct Testimony of Mark Pyatt with various supporting documents |
ISSUE
Complainant appeals, on the grounds of exemption, the decision of the Taney 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 Taney 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. (Ex. A).
- Complainant’s Purpose and Operation. Complainant’s stated purpose is “building, restoring and renewing the promise of a great marriage”. (Ex. B). For this purpose, Complainant provides marriage counseling services from licensed psychologists and counselors at the subject location. (Ex. A).
It offers scholarships on a sliding scale based upon the ability to pay of the couples needing counseling. No one is denied services based on inability to pay. The corporation is not designed to make a profit and, most years, there is no profit. It relies upon charitable contributions from donors. If any profit is realized, that profit goes back into the operation to provide additional services and scholarships to those in need of counseling. (Ex. A).
It provides counseling services to Christians and non-Christians. (Ex. A).
All real and personal property of the corporation is used exclusively for marriage counseling. (Ex. A).
- Identification of Subject Property. The subject property is identified by map parcel number 08-5.0-22-000-000-030.004. It is further identified as 2715 Sunset Inn Road, Branson, Taney County, Missouri 65616.
- Description of Subject Property. The subject property is a 10.22 acre tract improved with a residence and a barn built in approximately 1979. (property record card attached to Exhibit E). The property is further improved with a chapel and three cottages. (Ex. G).
- Previous Exempt Status. The Taney County Board of Equalization found this property to be exempt for tax year 2012. (Attachment A to Exhibit G). 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).
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. Helping couples to maintain healthy marriages is a benefit to both the individuals, specifically, and society as a whole.
ORDER
The taxable status for the subject property as determined by the Assessor and sustained by the Board of Equalization for Taney 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. 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 10th day of July, 2014.
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 mailed postage prepaid on this 10th day of July, 2014, to: Craig Overstreet, 500 West Main Street, Suite 305, Branson, Missouri 65616, Attorney for Complainant; Jill Patterson, 3140 East Division Street, Springfield, Missouri 65802, Attorney for Respondent; William McCullah, Special County Counselor, 221 Main Street, P.O. Box 370, Forsyth, Missouri 65653; Chuck Pennel, Assessor, 132 David Street, P.O. Box 612, Forsyth, Missouri 65653; Donna Neeley, Taney County Clerk, P.O. Box 156, Forsyth, Missouri 65653; Sheila Wyatt, P.O. Box 278, Forsyth, Missouri, Taney County Collector.
Jacklyn Wood
Legal Coordinator