Thomas L Sr & Linda Potter v. Rick Kessinger, Assessor Greene County

April 10th, 2018

STATE TAX COMMISSION OF MISSOURI

 

THOMAS L. POTTER, SR., & LINDA POTTER, )

)

  
  )  
              Complainants, )  
  )  
v. ) Appeal No. 17-33022
  )

)

 Parcel/Locator No. 88-13-23-320-001
RICK KESSINGER,  ASSESSOR, )  
GREENE COUNTY, MISSOURI,

Respondent.

 )

)

  

 

DECISION AND ORDER

 

HOLDING

 

The determination by Respondent Rick Kessinger, Assessor, Greene County, Missouri, (Respondent) to place the subject property on the tax assessment roll for tax year 2017 is AFFIRMED.  Complainants Thomas L. Potter, Sr., and Linda Potter (Complainants) did not present substantial and persuasive evidence to establish that the subject property is exempt from ad valorem taxation for tax year 2017.

Case decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).

Procedural Background

On January 12, 2018, during a Prehearing Conference of the parties, Complainants appeared pro se, and Respondent appeared personally and by counsel Aaron Klusmeyer.  The parties agreed to waive an oral Evidentiary Hearing and to submit the appeal for decision on the evidence, exhibits, and case law presented during the Prehearing Conference.  The evidentiary record was announced closed.  On January 19, 2018, Respondent requested that the Hearing Officer also review an additional case in the process of rendering a decision in Complainants’ appeal, which request was granted.

ISSUE

Complainants appealed on the ground of religious exemption.  Respondent initially set the true value in money (TVM) of the subject property at $80,789 (assessed value $15,350), as residential property, as of January 1, 2017, and placed the subject property on the assessment rolls.  The State Tax Commission (STC) takes this appeal to determine whether the subject property was entitled to an exemption from ad valorem taxation as of January 1, 2017.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

FINDINGS OF FACT

  1. Jurisdiction. Jurisdiction over this appeal is proper.  Complainant timely appealed to the State Tax Commission.
  2. Evidentiary Hearing. The parties waived an oral evidentiary hearing in this appeal and submitted the issue of exemption on the record of evidence, exhibits, and case law tendered by the parties during the Prehearing Conference on January 12, 2018, at the Greene County Historic Courthouse, 940 N. Booneville Avenue, Springfield, Missouri.  Respondent subsequently requested to tender one additional case for consideration, which was allowed and received on January 19, 2018.
  3. Identification of Subject Property. The subject property is identified by parcel/locator number 88-13-23-320-001.  It is further identified as 801 S. Broadway Avenue, Springfield, Greene County, Missouri.  (Complaint; Exhibit A; Exhibit 1)
  4. Description of Subject Property. The subject property consists of .3129 acres, improved by a 4,428 square-foot, single-story church building constructed in about the 1930s or 1940s.  (Exhibit B)  The subject property does not include any residential living space and has been used exclusively as a church for approximately 77 years.  The exterior consists of rock and masonry construction.  (Exhibit B)  The subject property is located in central Springfield in a predominately residential area.  (Exhibit B) 
  5. Assessment. Respondent set a TVM for the subject property of $80,789 (assessed value $15,350), as residential property, as of January 1, 2017.  Respondent placed the subject property on the assessment rolls for 2017.
  6. Board of Equalization. During the Prehearing Conference of the parties, the parties acknowledged that Complainants did not receive timely notice that the subject property would not be exempt until after the deadline for filing an appeal to the BOE.  Further, Complainants did not receive the application for exemption because Respondent had inadvertently mailed the application to the wrong address.  Complainants appealed directly to the STC.  Respondent did not object to Complainants’ manner of appeal.
  7. Complainant’s Evidence. To support Complainants’ opinion that the subject property should be exempt from ad valorem taxation because the property is used exclusively for religious purposes, Complainants offered as evidence the following exhibits:
Exhibit A General Warranty Deed transferring subject property between the DePriests, who were the previous owners and had used the subject property exclusively as a church; Greene County Assessor’s Office records showing subject property’s exempt status in prior tax years
Exhibit B General Warranty Deed dated October 22, 2014, transferring subject property from the DePriests to Complainants; sales listing for subject property appearing on Greene County’s Beacon website
Exhibit C Deed of Trust dated October 22, 2014, conveying a security interest in the subject property in the amount of $100,000 from Complainants to Liberty Bank and MGL Trustee, LLC
Exhibit D Application for Tax Exempt Status in Greene County, Missouri
Exhibit E Copy of Land Assessment and Tax Book of Greene County, Missouri, and electronic record with entries for subject property from 1990 to 2016 showing no tax due because of the property’s exempt status
Exhibit F Articles of Incorporation of a Nonprofit Corporation establishing Great Hope Gospel Ministries; directing the assets of the corporation to be distributed upon dissolution to the Assemblies of the Lord Jesus Christ; forming the corporation for the purposes of religious teaching and preaching; and naming Complainants and Kenny Carpenter as directors of the corporation
Exhibit G Certificate of Incorporation for Great Hope Gospel Ministries issued by Secretary of State Jason Kander; Letter of Limited Exemption from Missouri Sales and Use Tax on Purchases and Sales (Religious) for Great Hope Gospel Ministries issued by the Taxation Division of the Missouri Department of Revenue; Employer Identification Number for Great Hope Gospel Ministries issued by the Federal Internal Revenue Service; Great Hope Gospel Ministries Doctine Statement and Bylaws
Exhibit H Sims v. O’Flaherty, Assessor, Jackson County, Missouri, STC Appeal No. 1983-5070 (March 29, 1985)
Exhibit I Commercial Appraisal Review Checklist issued to Liberty Bank valuing the subject property in a range from $70,000 to $100,000 and identifying the subject property’s type as “church”
Exhibit J Title insurance policy noting the chain of title from the DePriests who operated the subject property as a church and identifying the subject property as a church
Exhibit K Warranty Deed by Corporation dated September 11, 1985, transferring the subject property from Sunset Church of Christ, Inc., to the DePriests, the Crons, the Kenneys, and the Deckers; Quit Claim Deed dated May 1, 2003, in which the Deckers quit claimed their interest in the subject property in favor of the DePriests; Quit Claim Deed dated May 1, 2003, in which the Kenneys quit claimed their interest in the subject property in favor of the DePriests; Quit Claim Deed dated July 11, 2003, in which the Crons quit claimed their interest in the subject property in favor of the DePriests
Exhibit L Photograph of Complainant Mr. Potter standing in front of the subject property’s sign, “Great Hope Gospel Ministries”
Exhibit M 2017 Green County Real Estate Tax Statement for the subject property showing an assessed value of $15,350.00
Exhibit N Calling card and flyer for Great Hope Gospel Ministries introducing Complainants as pastors of the church; offering to the community free, 24 hours per day/seven days per week, ministerial counseling, funeral services, prayer requests, and house and hospital visits; providing a schedule for Sunday morning worship services and Thursday evening Bible study

 

Respondent did not object to Complainant’s exhibits, all of which were admitted into the record.

According to Complainant’s exhibits, Complainants purchased the subject property in October 2014.  (Exhibit B)  Complainants were Christian missionaries and Bible teachers in Ireland for nearly 20 years before returning to the United States and settling in Springfield.  Complainants have been in the ministry profession for 47 years.  (Exhibit N)  Complainants purchased the subject property so that Great Hope Gospel Ministries (GHGM) could operate a Christian church.  (Exhibits F, G, L)  Complainants purchased the subject property from the DePriest family, who had previously owned the subject property as individuals and had operated the church under a different name.  (Exhibits A, B, E)  Wayne DePriest was one of the previous owners of the subject property and the pastor of the church.  (Exhibits B, K)  For approximately 77 years, the subject property was exempt from ad valorem taxation because it was used exclusively as a church.  (Exhibits A, B, E)

  1. Respondent’s Evidence. Respondent did not dispute the facts as established by Complainants’ evidence and exhibits.  However, Respondent argued that, to be considered exempt from ad valorem taxation under Missouri law, real property must be owned and operated on a not-for-profit basis, but the subject property was owned by Complainants as individuals.  Respondent offered as evidence the following exhibits:
Exhibit 1 Colony Plaza Associates, LP, v. Cathy Rinehart, Assessor of Clay County, Missouri, STC Appeal No. 15-32015 (March 14, 2017)
Exhibit 2 St. Louis Aquacenter, Inc., v. Feddie Dunlap, Assessor of the City of St. Louis, Missouri, STC Appeal No. 13-20003 (May 27, 2015)

 

Complainants did not object to Respondent’s exhibits, which were received into the record.

  1. Presumption of Correct Assessment Not Rebutted. Complainants did not present substantial and persuasive evidence to rebut the presumption of correct assessment and to establish that the subject property should be exempt from ad valorem taxation for the 2017 tax year.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The STC has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious, including the application of any abatement.  The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the BOE, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.  Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo. 

In any county or the City of St. Louis, the owner of the subject property may appeal directly to the STC where the assessor fails to notify him of an initial assessment or an increase in assessment from the previous year prior to 30 days before the deadline for filing an appeal to the board of equalization, including instances in which real property was transferred and the prior owner was notified.  12 CSR 30-3.010.

In this appeal, the parties did not dispute that Complainants did not receive timely notice that the subject property would be placed on the tax assessment rolls to allow for appeal to the BOE; thus, direct appeal to the STC under these circumstances was proper.

Basis of Assessment

The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.  Article X, Sections 4(a) and 4(b), Mo. Const. of 1945.  The constitutional mandate is to find the true value in money for the property under appeal.  By statute, real property and tangible personal property are assessed at set percentages of true value in money:  residential property at 19%; commercial property at 32%; and agricultural property at 12%.  Section 137.115.5 RSMo (2000) as amended.

Exemption

Tax exemptions are not favored in the law and statutes granting exemptions are to be strictly, yet reasonably, construed against the one claiming the exemption.  Missouri Church of Scientology v. State Tax Commission, 560 S.W.2d 837, 844 (Mo. banc 1987); State ex rel. Union Electric Co. v. Goldberg, 578 S.W.2d 921, 923 (Mo. banc 1979).  Article X, Section 6.1 of the Missouri Constitution provides, in pertinent part:

[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, for agricultural and horticultural societies, or for veterans’ organizations may be exempted from taxation by general law.

 

According to Section 137.100, in relevant part, 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, 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, educational or charitable purposes.

 

In determining whether property is eligible for exemption, Missouri courts are mindful that each tax exemption case is peculiarly one which must be decided upon its own facts, turning upon the particular record presented.  Rollings v. Shipman, 341 S.W.3d 777, 780 (Mo. App. E.D. 2011).  The burden is on the property owner to prove that his property is exempt from taxation.  Rollings, 341 S.W.3d at 780.

 

Religious Exemption

 

The legal test for a religious exemption is whether:

 

(1)        the primary and inherent use of the property is for “religious worship”.  “Religious worship” embodies as a minimum requirement a belief in a Supreme Being and references the rituals, customs, and practices required or believed necessary to carry out the faith’s belief in its Supreme Being; and

 

  • the property is owned and operated on a not-for-profit basis.

 

CSCEA v. Nelson, 898 S.W.2d 547, 549 (Mo. banc 1995); Missouri Church of Scientology v. State Tax Commission, 560 S.W.2d 837, 842 (Mo. banc 1978); Temple Emanuel v. Morton, STC #88-11774.

Here, the only element of the test in question is the second element, i.e., whether the subject property is “owned and operated on a not-for-profit basis.”  To satisfy this element, 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 of Missouri v. State Tax Commission, 566 S.W.2d 213, 224 (Mo. banc 1978); Twitty v. State Tax Commission, 896 S.W.2d 680, 684 (Mo. App. S.D. 1995).  Respondent argues, and Complainants acknowledge, that the subject property has been legally owned by Complainants, as individuals, since October 2014 when they purchased the subject property from Pastor DePriest’s family.  (Exhibits A, B, C)  Respondent argues that the subject property cannot be considered exempt for tax year 2017 because it is owned by private individuals.

To support his argument that the subject property should not be exempt, Respondent relies on two cases:  Colony Plaza Associates, LP, v. Cathy Rinehart, Assessor of Clay County, Missouri, STC Appeal No. 15-32015 (March 14, 2017); and St. Louis Aquacenter, Inc., v. Freddie Dunlap, Assessor of the City of St. Louis, Missouri, 2015 WL 3486048 (Mo.St.Tax.Com.) STC Appeal No. 13-20003 (May 27, 2015).

In Colony Plaza, the subject property consisted of a 111-unit, 11-story, rent-subsidized apartment building for senior tenants.  The subject property was owned by the complainant, a for-profit limited partnership registered with the State of Missouri.  The complainant was, in turn, owned by an entanglement of for-profit and not-for-profit entities.  The complainant had received state and federal tax credits when it purchased the building and agreed to be bound by a land use restriction agreement that limited rent and required the complainant to lease to low-income individuals.  However, the complainant did not provide housing for persons unable to pay and did not waive or reduce rent when tenants were unable to pay.  Id., STC Appeal No. 15-32015 at 8-9.  The complainant conducted credit reviews of potential tenants and rejected some potential tenants due to bad credit.  The complainant’s use of the property appeared to be as an investment.  There, the STC held that the subject property was not entitled to an exemption because the evidence established that complainant was not a not-for-profit organization, regardless of the not-for-profit status of some of its parent organizations, and the “overall tenor of the evidence [implied] that the primary and inherent use of the subject property [was] not as a charity.  Id., STC Appeal No. 15-32015 at 4.

In St. Louis Aquacenter,  the subject property, a commercial building, consisted of approximately 100,000 square feet and was known as the International Building Condominium.  The subject property was owned by International Building Company, which leased the property to the City Museum, which subleased 12,500 square feet of the property to the complainant, St. Louis Aquacenter.  The complainant was a not-for-profit organization that educated society about the importance of water, conservation, acquatic life, and the environment.  The complainant offered tours, day camps, and other programs.  The complainant donated free tours to approximately 1,000 charities, schools, and other non-profits each year.  Id. 2015 WL 3486048 at *1-*2.  The STC found that the complainant had standing to appeal the assessment because, as a sub-lessee of a portion of the building, it had a possessory right to part of the subject property, including the ad valorem property taxes, which were passed through to the complainant by the sub-lease.  Id. at *2-*3.  However, the STC concluded that the subject property did not qualify for exemption under the Franciscan test because the evidence showed “without question” that the owner of the subject property was a for-profit corporation even though complainant was a not-for-profit organization.  The STC reasoned that the owner of the subject property, International Building Company, leased the building to generate income for the property owner – a for-profit use.   Id. 2015 WL 3486048 at *5.  The STC further reasoned that International Building Company was not leasing the subject property for a public, charitable, or religious use and was instead leasing the subject property in order to generate rents for itself as a for-profit entity.  Id. at *6.

Notably, however, Missouri courts have held that the “equitable” owner of a property can be considered the owner for tax exemption purposes.  Rollings, 341 S.W.3d at 781; see also Black’s Law Dictionary Online 2nd Ed. (“equitable owner” is the term given to the person who is the recognized owner of the property but who uses a trustee to administer the property; https://thelawdictionary.org/owner-equitable/ (last retrieved February 27, 2018)); and see Merriam-Webster Online Dictionary (equitable owner: one (as a beneficiary of a trust) who is considered to have rights or obligations of an owner regardless of legal title on the ground of equity; https://www.merriam-webster.com/dictionary/equity (last retrieved February 27, 2018)).  Missouri courts have also held that, for taxation purposes, the term “ownership” does not have a fixed, definite meaning.  Id.  The Rollings court reasoned:

Furthermore, the [Missouri Supreme] Court has noted that often, the word “owner” is “used to describe one who has dominion or control over a thing, the title to which is in another.” Id. (quoting Black’s New Dictionary (Rev. 4th Ed.)). Finally, the Court has held that “the word ‘owned’ in an exemption statute is generally construed to comprehend an equitable as well as a legal ownership.”  State ex rel. City of St. Louis v. Baumann, 348 Mo. 164, 153 S.W.2d 31, 35 (1941) (quoting Cooley on Taxation (1924) § 667).

 

Id. at 781-82.

In Rollings, the complainant was a school district seeking the exemption of real property operated by the school district on a not-for-profit basis.  Id. at 779.  The school district had difficulty financing the purchase of the property, so it agreed to a transaction in which the district would lease the property from a privately-held trust for ten years and then would receive title to the property.  Id.  There, the STC determined that the property did not qualify for exemption under Section 137.100(5).  Id.  The circuit court reversed the STC’s decision.  Id.  On appeal, the Court of Appeals affirmed the circuit court’s judgment on the ground that the school district was the equitable owner of the property.  Id. at 785.  The Court found the existence and terms of a lease between the school district and the trustees significant.  Id. at 783.  The lease provided that the school district had sole possession and use of the property; had the sole obligation to maintain the property and to obtain property, casualty, and liability insurance for the property; and had the right to terminate the lease, the right of first refusal to purchase the property, and an option to purchase the property at the end of the lease term.  Id.  During the term of the trust, the trustees held legal title to the property while the school district was the charitable beneficiary of the trust and held equitable title to the poperty.  Id.  In addition to the lease, the trust provided that, upon termination, the trust would distribute legal title to the property to the school district.  Id.  The trust was irrevocable and could not be altered or amended unless specifically authorized by the lease agreement.  Id.

Complainant’s Burden of Proof

There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a STC appeal still bears the burden of proof.  The taxpayer is the moving party seeking affirmative relief.   Therefore, the Complainant bears the burden of proving, by substantial and persuasive evidence, the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”  Westwood Partnership, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003); Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. W.D. 1991).  “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348.  Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion.  Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).  Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact.  Cupples Hesse Corp., 329 S.W.2d at 702.  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). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).

Private Versus Not-for-Profit Ownership

In this case, in addition to their exhibits establishing the legal ownership of and the not-for-profit use of the subject property, Complainants rely on the case of Sims v. O’Flaherty, Assessor for the County of Jackson, Missouri, 1985 WL 16062 (Mo.St.Tax.Com.) STC Appeal No. 1983-5070 (March 29, 1985) to support their argument that the subject property should be exempt.

In Sims, like the instant case, the parties did not dispute that the property at issue was a church used for religious worship and programs connected with the church.  There, like this case, the evidence showed that the complainant, an established pastor, had purchased the subject property, which had been used previously as a church.  Sims, 1985 WL 16062 STC at *5.  The subject property was deeded in the complainant’s name and his wife’s name.  Id.  Complainant and his wife took out a mortgage and made the initial down payment on the property, made several of the initial mortgage payments, and paid for numerous maintenance and repair bills.  Id. at *6.  The complainant then renamed the subject property to align with his own ministry and incorporated the church organization as a Missouri not-for-profit corporation, certified by the Missouri Secretary of State.  Id. at *5.  However, the subject property remained in the complainant’s ownership.  Id.  The complainant’s evidence established that the subject property had a “church-like” appearance; that worship services, prayer meetings, bible studies, wedding ceremonies, and various other religious activities were regularly held at the subject property; that no one resided on the premises of the subject property; and that a day care center operating inside the church building had received an exemption from licensure by the Department of Social Services because it was a “religious order.”  Id.

The Jackson County Assessor argued that the fact that the ownership of the subject property was vested in a private individual, rather than a not-for-profit corporation or entity, meant that the property could not be “dedicated unconditionally to the charitable activity in such a way that there will be no profit, presently or prospectively, to individuals or corporations” under the Franciscan test.  Id. at *6.  The Jackson County Assessor also argued that the subject property could be mortgaged, devised, or sold for the complainant’s personal gain.  Id.  However, no evidence was presented showing that the complainant had personally gained from owning the subject property as an individual.  Id.

In its Decision and Order, the STC reasoned that the use of the property was the determinative factor to consider for exemption.  Sims, STC Appeal No. 1983-5070 at *7.  In light of the Jackson County Assessor’s argument concerning ownership, the STC explained that neither the Missouri Constitution, the statute, nor the Franciscan test created a condition based on the form of ownership to qualify for exemption.   Id.  The STC further reasoned:

When the entity with ownership is a not-for-profit corporation, that is an indication that it does not hold its property ‘for private or corporate profit.’

. . .

The property might ultimately be sold at a profit by the [complainant], but the property could ultimately be sold for a profit by any entity that might own it. If ‘not held for private or corporate profit’ is interpreted in this manner, no property in Missouri is exempt under Section 137.100.5.

 

Id. at *6-*7.  The STC found significant that before and after the complainant’s purchase of the subject property, the property was actually and regularly used exclusively for religious worship.  Id. at *7.  The STC also found significant that the complainant had received no rent for the subject property and had paid many of the expenses of the church from his own funds.  Id.  The STC reasoned that exemption statutes are given a strict but reasonable construction so as not to curtail the intended scope of the exemption when measured against the peculiar facts of each tax exemption case; thus, granting the exemption in the Sims case was proper.  Id.

Although research does not reveal any Missouri court case expressly overturning this decision of the STC, no STC decision or Missouri court case was found that follows the Sims decision.

Discussion

            In this case, one might reasonably draw the conclusion that the subject property should be exempt from ad valorem taxation for tax year 2017 based on Complainants’ substantial evidence.  However, the evidence was not persuasive when analyzed against current Missouri law.  Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion.  Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).  Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact.  Cupples Hesse Corp., 329 S.W.2d at 702.

Complainants’ substantial evidence, which Respondent did not dispute, showed that Complainants, as individuals, bought the subject property from the previous pastor’s family in order to finance the purchase of the property so that GHGM could operate a Christian church.[1]  Complainants’ names as individuals appear on the deed to the subject property.  The subject property is used as a place of religious worship by GHGM.  Complainants are some of the directors of GHGM.  The articles of incorporation for GHGM direct that, upon dissolution of the corporation, the assets of the corporation are to be distributed to the Assemblies of the Lord Jesus Christ.  Complainants, unlike the property owners in Colony Plaza and St. Louis Aquacenter, are not a for-profit entity.  Complainants are pastors and missionaries of the Christian religious faith tradition.  The subject property was being used on a not-for-profit basis, as a place of religious worship, from the date of Complainants’ purchase in 2014 to the date of the Prehearing Conference in January 2018.  The evidence established that this use is consistent with and has not deviated from any of the previous individual owners’ decades-long tax-exempt use of the subject property as a place of religious worship.  The record is devoid of any evidence indicating that Complainants, as individuals, have ever received any rent or income from GHGM’s use of the subject property[2]; rather, during the Prehearing Conference, Complainants discussed that they have donated their own personal funds and labor to help GHGM make repairs to and maintain the subject property.

The totality of this substantial evidence leads to the reasonable inference that GHGM, the operator of the subject property, has been the beneficiary of Complainants’ monetary and physical investment in the subject property.  Such evidence leads to the equally reasonable inference that, for all practical purposes, GHGM has dominion and control over the subject property while Complainants have acted as patrons of the subject property.

However, unlike the school district and the trust in Rollings, there is no formal agreement between GHGM and Complainants establishing that GHGM has the legal right to sole possession of the subject property, that Complainants cannot divest themselves of the subject property while GHGM uses it, or that GHGM has any duty to maintain or insure the subject property.  Id.  341 S.W.3d at 781-83.  Although the articles of incorporation for GHGM direct that, upon dissolution of the corporation, the assets of the corporation are to be distributed to the Assemblies of the Lord Jesus Christ, the articles do not include a schedule of assets listing the subject property as one of the assets of GHGM.  Under these specific circumstances, even though the evidence established that Complainants hold title to the subject property as individuals for altruistic reasons, the STC, a quasi-judicial agency constrained to apply current Missouri law to the facts as established by the evidence in the record and not a court sitting in equity, cannot conclude that GHGM, the not-for-profit church organization, is the equitable owner of the subject property for tax year 2017 to satisfy the second element of the test for religious exemption.

ORDER

The determination by Respondent to place the subject property on the tax assessment roll for tax year 2017 is AFFIRMED.

Application for Review

A party may file with the STC 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 Greene 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 April 10, 2018.

STATE TAX COMMISSION OF MISSOURI

Amy S. Westermann

Senior Hearing Officer

 

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 10th day of April, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

 

Jacklyn Wood

Legal Coordinator

 

[1] During the Prehearing Conference, Complainants acknowledged that, due to Respondent’s placement of the subject property on the tax assessment rolls for 2017, they were in the process of consulting with providers of professional services regarding the retitling of the subject property in the name of the not-for-profit church.

[2] Although Complainants could conceivably divest themselves of the subject property by selling it or generate income by leasing it in the future rather than allowing the church to continue its not-for-profit operation, in determining whether the subject property is exempt for a particular tax year, there is no requirement that the owner prove that all conceivable future uses will be charitable.  See Rollings, 341 S.W.3d at 785, FN 5.