ST. CHARLES COUNTY LAND TRUST, )
v. ) Appeal Number 01-32567
EUGENE ZIMMERMAN, ASSESSOR, )
ST. CHARLES COUNTY, MISSOURI, )
DECISION AND ORDER
Assessment by Assessor that subject property was not tax exempt and valued at an assessed value of $100 was sustained by the St. Charles County Board of Equalization. Hearing Officer affirms the determination of the subject property not being tax exempt..
Complainant represented by Counsel, Joann Leykam, County Counselor, St. Charles County, Missouri.
Respondent represented by Counsel, Lisa Leslie, Assistant County Counselor, St. Charles County, Missouri.
Parties submit case on exhibits filed and briefs. Case 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. The specific issue to be decided is whether the preservation of a tract of vacant land in its natural state constitutes a charitable use of the subject property by Complainant.
Complainant appeals the decision of the St. Charles County Board of Equalization. Respondent assessed the subject property as residential property, valued at $500, assessed value of $100. 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).
Parties by Joint Motion waived evidentiary hearing and submitted the case on exhibits and briefs. Complainant’s Brief filed with the Commission on April 8, 2002. Respondent’s Brief filed on April 30, 2002. Complainant’s Reply Brief filed on May 20, 2002.
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.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Charles County Board of Equalization.
2. The subject property consists of a 2.44 acre tract located on Harvester Road, St. Charles, Missouri. It is identified by parcel number 3-0003-3280-00-16. Complaint for Review of Assessment, BOE Decision Letter, Complainant’s Brief, p. 4.
3. The following exhibits were received into evidence on behalf of Complainant:
Exhibit A 501(c)(3) Letter of Determination from the Internal Revenue Service on Complainant.
Exhibit B Internal Revenue Service Form 1023 and supporting documentation filed by Complainant.
Exhibit C Application for Exemption from Assessment filed by Complainant with the St. Charles County Board of Equalization.
Exhibit D Plat of Subject Property.
Exhibit E Aerial photograph of Subject Property.
Exhibit F Written Direct Testimony of Thomas Barklage, Chairman of Complainant.
Exhibit G Written Direct Testimony of Bettie Yahn-Kramer, Director of St. Charles County Parks Department.
4. The following exhibits were received into evidence on behalf of Respondent:
Exhibit 1 Application for Exemption of assessment filed by Complainant (Complainant’s Exhibit C).
Exhibit 2 Aerial photograph and Plat of Subject Property (Complainant’s Exhibits E & D).
Exhibit 3 Copy of Section 137.100, Revised Statutes of Missouri.
Exhibit 4 Copy of Article X, Section 6, Missouri Constitution.
Exhibit 5 Copy of denial of exemption letter dated March 29, 2001, on the subject property.
Exhibit 6 Three page document with information relating to the Franciscan Test for exemption.
Exhibit 7 Written Direct Testimony of Matt Brown, Special Assessments Manager, for Respondent.
5. The St. Charles County Land Trust is a 501(c)(3) organization granted tax exempt status by the Internal Revenue Serve. Exhibit A.
6. The Complainant was established by a joint effort of St. Charles County and citizens of the County interested in preserving land in the County in its natural state. Exhibit B.
7. The subject property is a land locked parcel without road access. It is surrounded by residential development which would only permit access to the land by trespassing over another property owner’s land. There are no activities which do or can take place on the land by the public. The tract simply exists as a vacant piece of land. It is not put to any use other than to continue to simply grow in its natural state. Exhibits E & D; Complainant’s Brief and Reply Brief.
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, Missouri Constitution of 1945; Constitution of 1945; Sections 138.430, 138.460(2), RSMo.
Burden of Proof
Complainant has the burden to present substantial 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. Tri-State Osteopathic Hospital Association, Inc. v. Blackall, 848 S.W.2d 571, 575 (Mo. App. S.D. 1993); State ex rel. Council Apartments v. Leachman, 603 S.W.2d 930, 931 (Mo. 1980). The party claiming an exemption from taxation is required to produce clear and unambiguous proof that it is entitled to an exemption; any doubt as to whether the party is entitled to an exemption from taxation operates against the grant of an exemption. American Polled Hereford Association v. City of Kansas City, 626 S.W.2d 237, 240 (Mo. banc 1982).
It is well established that taxation is the rule and exemption from taxation is the exception. Exemption is not favored in the law (See, Abbot Ambulance, Inc. v. Leggett, 926 S.W.2d 92, 95 (Mo. App. E.D. 1996); 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).
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 … 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 — charitable purposes;
Section 137.100(5), RSMo.
Franciscan Tertiary Test
The three part test in Missouri for determining whether property is entitled to a charitable exemption states that property is exempt from taxation if: (1) the property is owned and operated on a not-for-profit basis; (2) the property is dedicated unconditionally to the charitable activity or use; and (3) the dominant use of the property is for the benefit of an indefinite number of people, and there is a benefit to society in general. Franciscan Tertiary Province of Missouri, Inc. v. State Tax Commission, et al., 566 S.W.2d 213 (Mo. banc 1978).
In the case presently before the Commission, the relevant inquiry is whether the Subject Property is actually and regularly used for a charitable purposes, as required by Section 137.100(5), RSMo.
The Subject Property is a landlocked parcel of approximately 2.4 acres located in a subdivision. The Complainant states that it received the property “in its natural state” and that the property “was accepted for preservation of the tract as green space.” The Complainant makes no active use of the property. Complainant states that it “does not have an intent to develop the property,” “no activity on property contemplated” and “the subject property is not a park, nor will it become one.” Complainant’s Brief, p. 4-5.
The term “actually and regularly used” is not defined in the tax statues. Absent statutory definition, words used in statutes are given their plain and ordinary meaning. American Healthcare Management, Inc. Et al. v. Director of Revenue, 984 S.W.2d 496, 498 (Mo. banc 1999). Although no Missouri cases have directly addressed the issue of whether land held for the purpose of preserving “green space” is “actually and regularly used” for a charitable purpose so that it is exempt from taxation, it is clear that some actual activity must be undertaken in order to meet this requirement. See, Sunday School Board of the Southern Baptist Convention v. Mitchell, 658 S.W.2d 1, 5 (Mo. banc 1983) (the property must be dedicated unconditionally to the charitable activity); Abbott Ambulance, Inc. v, Leggett, 926 S.W.2d 91 (Mo. App. E.D. 1996) (it is the purpose for which the owner actually uses the property that is controlling, not potential purposes for which the property could be used.); Missouri United Methodist Retirement Homes v. State Tax Commission, 522 S.W.2d 745 (Mo. banc 1975) (a charitable use exemption depends upon the use made of the property and not solely upon the stated purpose of an organization).
In the case presently before the Commission, if Complainant provided an educational experience on the Subject Property that was “for the benefit of an indefinite number of people,” the “charitable activity” function required in the three-part analysis stated in the Franciscan case might be fulfilled. Because no activity takes place on the Subject Property owned by Complainant, it cannot be said that the property is “used,” nor is it “for the benefit of an indefinite number of people” so that it would be entitled to exemption from taxation. If vacant land, which is put to not use but which is said to be reserved as “green space” by the holder was intended to be exempted from taxation, the legislature in its enactment of Section 137.100(5) could have so provided.
Complainant has failed to meet its substantial burden to establish that the Subject Property is used for a charitable purpose which benefits an indefinite an indefinite number of people or society in general, as is required by the Franciscan test. The best that can be said for this 2.4 acre tract of land is that it provides a natural buffer to those landowners whose homes surround the Subject. In so doing it is not a gift that brings the hearts and minds of an indefinite number of people under the influence of education or religion, or equip them for life, or relive the government of any burden. See, Salvation Army v. Hoehn, 188 S.W.2d 826, (Mo. banc 1945).
The assessment of the subject property made by the Assessor and sustained by the Board of Equalization for St. Charles County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2001 and 2002 is $100.
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 St. Charles 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 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 June 17, 2002.
STATE TAX COMMISSION OF MISSOURI
W. B. Tichenor
Chief Hearing Officer
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On June 17, 2002, Chief Hearing Officer, W. B. Tichenor, entered his Decision and Order (Decision) affirming the assessment of the subject property by the Assessor, which had been sustained by the St. Charles County Board of Equalization, that the subject property was not entitled to exemption from taxation under Section 137.100, RSMo.
Complainant timely filed its Application for Review of the Decision. Respondent timely filed Response.
A review of the record in the present appeal provides the appropriate factual and legal basis for the determination made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal. Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995). Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
The Hearing Officer did not err in finding that the subject property was not used for a charitable purpose, nor did the Hearing Officer err in finding that the subject property was not for the benefit of an indefinite number of people.
The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified. Accordingly, the Decision is affirmed and adopted by reference as the Decision of the Commission.
Judicial review of this Order may be had in the manner provided in Sections 138.470 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.
SO ORDERED September 18, 2002.
STATE TAX COMMISSION OF MISSOURI
Sam D. Leake, Chairman
Bruce E. Davis, Commissioner
Jennifer Tidwell, Commissioner