RONALD G. BIERER, )
v. ) Appeal Number 01-60000
KAY CHILTON, ASSESSOR, )
HICKORY COUNTY, MISSOURI, )
DECISION AND ORDER
Assessment by Assessor that subject property was not tax exempt was sustained by the Hickory County Board of Equalization. Hearing Officer finds subject property to not be exempt under Section 137.100(5), as either a religious or educational property, assessment AFFIRMED.
Complainant appeared in person and by Counsel, Jeff Anderson, Bolivar, Missouri.
Respondent appeared Pro Se.
Case heard and decided by Chief Hearing Officer, W. B. Tichenor.
The Commission takes this appeal to determine whether the subject property is exempt from taxation for the tax years 2001 and 2002.
Complainant appeals the decision of the Hickory County Board of Equalization. Respondent assessed the subject property as residential and agricultural real property. This assessment was sustained by the Board of Equalization. Complainant contends that the subject property is exempt from taxation under the provisions of Section 137.100(5), under a claim of religious and educational use. An Evidentiary Hearing was conducted on April 3, 2002, before W. B. Tichenor, Chief Hearing Officer, at the Hickory County Courthouse, Hermitage, Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record and the Briefs filed by the parties, enters the following Decision and Order.
The following exhibits were received into evidence on behalf of Complainant.
Exhibit A Letter dated June 28, 2001, from Complainant, which was attached to the Complaint for Review of Assessment.
Exhibit B Letter dated February 26, 2002, from Complainant to the Commission.
Exhibit C Two pages of photographs of the subject property showing an over head view of the house, barn and other buildings and 8 individual photographs of the house and other structures on the subject property.
Complainant testified in his own behalf as to how the subject property was used for religious and educational purposes.
The following exhibits were received into evidence on behalf of Respondent.
Exhibit 1 Letter dated December 18, 2001, with 12 photographs of the subject property attached.
Exhibit 2 Property Record Card and deeds of record for the subject property.
FINDING OF FACTS
1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Hickory County Board of Equalization.
2. The subject property is located at RR # 2, Box 55, Farm Road 41, Wobble, Missouri. The property is identified by locator number 12127. The property consists of a 50.87 acre farm with a home site. The home site is improved by a house, barns and various utility sheds and buildings. There is a sign located in the front yard of the subject house at the driveway entrance which states: Church of God of Isreal – Meetings Tuesday 7:00 P.M. Exhibits C & 1.
3. The assessed value of the property was not contested by Complainant.
4. The subject property is the place of residence for Complainant and his family. Tr. 6, Lines 23-24.
5. Complainant conducts worship services in his home and one of the structures on the subject property. Said structure being located behind the house on the subject property. Tr. 24, Lines 12-22.
6. The persons attending the once a week worship services consist of Complainant, his wife and children, his father-in-law (who is the other minister of the Church of the God of Isreal) and sometimes four or five other people. The majority of persons attending worship services on the subject property were members of Complainant’s family. Tr. 24, Line 23 – Tr. 25, Line 9.
7. There is no membership role for the Church of the God of Israel, anyone who happens to show up for a Tuesday night worship service can take part in a church business meeting. Tr. 25, Lines 13-21. Complainant became the First Elder of the Church of God of Israel because he started the church, with his father-in-law and one other individual, the three men elected themselves the elders of the church. Tr. 26, Line 25 – Tr. 27, Line 10.
8. Complainant and his wife home school their children on the subject property. Tr. 28, Line 4 – Tr. 31, Line 1.
9. The subject property was conveyed by Warranty Deed, dated December 15, 1998, to First Elder Ronald G. Bierer and his Successors in Office for the Church of the God of Isreal.
10. Ronald G. Bierer executed a Beneficiary Deed, dated December 28, 2000, naming Julie Ann Bierer and Jan B. Johannessen as Grantee Beneficiaries. Said deed being recorded on December 28, 2000, in Book 378, Page 190 of the records of the Recorder of Deeds of Hickory County, Missouri.
11. The primary use of the subject property is not for religious worship, as a school or college or for an educational purpose. The primary use of the property is as a home site for Complainant and his family.
CONCLUSIONS OF LAW
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.4, RSMo.
Board of Equalization Presumption
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).
Burden of Proof
Complainant has the burden to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 895 (Mo. banc 1978). In order to meet this burden in an appeal seeking exemption from taxation, the Complainant must meet the substantial burden to establish that the property falls within an exempted class under the provisions of Section 137.100. State ex rel. Council Apartments v. Leachman, 603 S.W.2d 930, 931 (Mo. 1980).
Exemption Not Favored
It is well established that taxation is the rule and exemption from taxation is the exception. Exemption is not favored in the law. (See, Missouri Church of Scientology v. STC, 560 S.W.2d 837, 844 (Mo. banc 1977); CSCEA v. Nelson, 898 S.W.2d 547, 548 (Mo. banc 1995), citing Scientology).
Property Exempt From Taxation
The following subjects are exempt from taxation for state, county or local purposes:
(5) All property, real and personal, actually and regularly used exclusively for religious worship, schools and colleges, 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 therefore is used wholly for religious, educational or charitable purposes.
Section 137.100(5), RSMo.
Property Not Primarily Used for Religious Worship
Complainant has failed to present substantial and persuasive evidence that the use of the subject property falls within the parameters for exemption established by statute for exemption on a religious ground. Section 137.100(5) states in pertinent part that real property in order to be exempt based on religious use must be, actually and regularly used exclusively for religious worship. The term exclusively has been interpreted by the courts to mean that the primary and inherent use must be for the alleged exempt purpose in this instance religious worship, as opposed to a mere secondary and incidental use. Missouri United Methodist Retirement Homes v. The State Tax Commission, 522 S.W.2d 745, at 751 (Mo. Sup. Ct. 1975), citing Young Women’s Christian Ass’n et al. v. Baumann, 130 S.W.2d 499, 502 (banc 1939).
The primary use of the subject property is for nothing other than to provide a residence for the Complainant, his wife and children and on occasion his father-in-law. The religious worship that takes place at Complainant’s home site, primarily with his own family, is not the primary and inherent use of the fifty acre farm, the house and other various buildings located on the property. The weekly church services are purely and completely secondary and incidental to the primary use of providing a home for Complainant and his family.
Complainant seeks reliance for exemption on the fact that he is not generating any income on the subject farm, that neither he nor his wife earn any income from outside work or selling of products off the farm and that the Church of the God of Israel does not receive tithes and offerings. None of these factors are relevant to determining a religious exemption. How Complainant makes a living for his family is not a relevant factor in this appeal. The fact that he has elected for whatever reasons to not seek to farm the fifty acres is not relevant. The only factor which bears on the exemption issue is the primary and inherent use of the property. That use is to provide a homesite for Complainant and his family. It is not as a place of worship.
Furthermore, although the Complainant asserts that the property is owned by a church, it is in actuality only owned by Complainant. The descriptive title of Elder applied to Complainant, by the Complainant when he organized the church, does not establish that as an Elder he holds the property in trust for the church. The names of the other two Elders of the Church of the God of Israel do not appear on the deed whereby Complainant took title to the property.
It is clear that Complainant is the actual owner of the property since he executed a beneficiary deed which, upon Complainant’s death will convey the property to two individuals as tenants in common. Ownership of property for a religious purpose is to be dedicated unconditionally to the religious purpose and activity in such a way that no profit, present or prospectively will accrue to individuals. Franciscan Tertiary Province v. STC, 566 S.W.2d 213, 223-224 (Mo. banc 1978).
Upon Complainant’s death the property can be sold and the proceeds divided between two individuals, instead of being retained and applied to a religious purpose. Complainant’s ownership of the property as an elder no more vests title in a religious entity than an individual who might be a pastor or deacon purchasing a property and simply so designating his title in the deed. Without governing documents of the church entity which establish the method and procedure for property to be held by the church, a single individual cannot take it upon himself to purchase property in his name and thereby claim it as a church property. No documents of church governance were offered into evidence which would establish the basic and necessary elements for purchase and sale of property by the Church of the God of Israel. There is nothing which establishes the authority of a single Elder to hold title to the property for the Church. There is nothing in this record to establish that the Church of the God of Israel has established that upon its dissolution that its property will be disposed of in such a manner as that the proceeds will be given to another religious entity.
Complainant and his family have every right to worship in whatever manner and under whatever tenants of faith they deem appropriate. The Hearing Officer in no way passes judgment on their belief system, religious practices or articles of faith, whatever they may be. However, the freedom which Complainant and his family enjoy to worship according to the dictates of their own conscience does not grant them the right to simply declare that their home is to be tax exempt. Nor is Complainant’s free exercise of his religion abridged in any manner by his home not being tax exempt. Under Complainant’s theory, every individual who is an active member of any religious organization could title their property in such a manner as to reflect their religious membership and then proceed to simply have family religious exercises in their home and claim tax exemption. This the law does not recognize or allow.
The law places a substantial burden on an individual or organization claiming exemption from taxation on a religious ground. That burden has not been met in this instance.
Property Not Primarily Used for Educational Purpose
Complainant’s claim to an exemption from taxation on the basis of an education use is likewise unpersuasive. Complainant’s education claim is not based upon the subject property being a school or college, but simply on the fact that he and his wife home school their children. Home schooling of children does not qualify a property for exemption from taxation. The primary and inherent use of the property is not for schooling of children, it is simply to provide a home for Complainant’s family. Neither does the fact that Complainant has his own personal library in his home qualify the subject property as primarily used for an educational purpose. Home schooling of Complainant’s children and maintaining a personal library from which Complainant lets people borry books is nothing more than a secondary and incidental activity which takes place at Complainant’s home.
Complainant has failed to meet the substantial burden to establish an educational exemption for the subject property.
The assessment of the subject property made by the Assessor and sustained by the Board of Equalization for Hickory County for the subject tax day is AFFIRMED.
Subject property is to be maintained on the assessment roles at the assessed value as originally determined by the Assessor for tax year 2001 and 2002.
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 grounds upon which it is claimed the decision is erroneous.
If an application for review of this 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 Hickory 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 or all protested taxes have been disbursed pursuant to ‘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 June 11, 2002.
STATE TAX COMMISSION OF MISSOURI
W. B. Tichenor
Chief Hearing Officer