Whetstone Boys Ranch v. Daniel Franks, Assessor Howell County

October 10th, 2014

State Tax Commission of Missouri


                                                     Complainant )
-vs- ) Appeal No. 13-61500
                                                       Respondent. )






Decision of the County Board of Equalization sustaining the assessments 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 Chrys Fisher, Esq.

Respondent is not represented by counsel.

This case is decided by Senior Hearing Officer, Luann Johnson, based upon exhibits provided by Complainant. Respondent presented no exhibits.


A IRS 501c(3) exemption letter
B Texas Certificate of Incorporation
C Articles of Incorporation
D Minutes of Organizational Meeting
E By-laws
F Affidavit of Jeremy Thompson, Executive Director
G Affidavit of Brandon Maxwell, Campus Supervisor (originally designated Ex. A)
H Supplemental Affidavit of Jeremy Thompson (originally designated Ex. A)



Complainant appeals, on the grounds of exemption, the decision of the Howell 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.


  1. Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Howell County Board of Equalization.
  2. Characteristics of Complainant. Complainant is a Texas Not-For-Profit Corporation (Ex. B). It is recognized by the Internal Revenue Service as tax exempt under Section 501(c) (3) of the Internal Revenue Code (Ex. A). In the event of dissolution, the assets of Complainant must go to another 501(c) (3) organization. (Ex. C).
  3. Complainant’s Purpose. Complainant’s stated purpose is:
[T]o receive and maintain a fund or funds of real or personal property, or both, and, subject to the restrictions and limitations hereinafter set forth, to use and apply the whole or any part of the income therefrom and the principal thereof exclusively for charitable, religious, scientific, literary, or educational purposes either directly or by contributions to organizations that qualify as exempt organizations under Section 501c(3) of the Internal Revenue Code and its regulations as they now exist or as they may hereafter be amended.

(Ex. C).

The corporation’s mission is to “sharpen the character of young men by modeling the life of Christ, mentoring them through authentic relationships, imparting the love of creation and teaching the joy of work, thus equipping them to be servant-leaders in their families and communities.” (Ex. H).

  1. Complainant’s Operation. Complainant serves boys between the ages of 13 and 17 who have been identified as at risk in their families, communities, and schools. This is defined as young men who are under a great deal of stress and have chosen unhealthy coping mechanisms. Many have been diagnosed with disorders such as ADD, ADHD, OCD, and Bi-Polar. Characteristics of the boys served include being beyond parental control, drug or alcohol use, apathy, lethargy, truancy, disrespectful attitudes, behavior problems, school problems, depression, anger, and/or low self-esteem, but does not include individuals with severe addictions or mental psychosis.

A minimum stay at the subject facility is 9 to 13 months. Enrollment is six to eight boys at a time. During that time, boys participate in year-round school personalized to the individual and allows for remediation/credit recovery. In addition to traditional education, students are also taught life-skills such as goal-setting, self-monitoring, responsibility, integrity and accountability. School work is completed in four days so the students can spend one day in community service each week. Electives are offered during the evenings and on weekends. A 3:1 staff/student ratio allows for maximum supervision and structure.

Vocational training is available through a mentoring program. Skills taught through vocational training are fence building/repair, carpentry, welding, leatherwork, gardening, plumbing and minor electrical.

Individual, group and family counseling is provided by a licensed therapist. Work-based therapy is provided through Whetstone’s animal husbandry program.

Tuition is $4,500 per month. This covers about half of the actual costs. The remainder comes from charitable donations. (Ex. H)

  1. Identification of Subject Property. The subject property is a 10 acre tract improved with a 12 bedroom residential housing facility, a barn and smaller outbuildings. It is identified as parcel number 07-5.0-15-000-000-001.040, more commonly known as 6850 County Road 2660, Mountain View, Howell County, Missouri. The property was originally valued by the Assessor at $263,760 (residential assessed value $50,110). Said value was approved by the Board of Equalization. (Ex. G; Complaint for Review of Assessment).

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).


            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 by providing structured education for at-risk young men.




The taxable status for the subject property as determined by the Assessor and sustained by the Board of Equalization for Howell 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.

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 Howell 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 October, 2014.




Luann Johnson

Senior Hearing Officer





Certificate of Service

Copy of the foregoing mailed this 10th day of October, 2014, to:

Chrys Fisher, 13 Court Sq. West Plains, MO 65775, Attorney for Complainant

Michael Hutchings, 326 Courthouse Sq., West Plains, MO 65775, Attorney for Respondent

Dennis K. Von Allmen, 35 Court Square, Room 200, West Plains, MO 65775, Howell County Clerk

Daniel Franks, 101 Courthouse Sq., West Plains, MO 65775, Howell County Assessor

Larry Spence, 104 Courthouse Sq., West Plains, MO 65775, Howell County Collector


Jacklyn Wood

Legal Coordinator