Wondrous Grade Ministries v. Zimmerman (SLCO)

November 1st, 2011

State Tax Commission of Missouri

 

WONDROUS GRACE MINISTRIES, INC.,)

)

Complainant,)

)

v.) Appeal No. 10-10613

)

JAKE ZIMMERMAN, ASSESSOR,)

ST. LOUIS COUNTY, MISSOURI,)

)

Respondent.)

 

ORDER NUNC PRO TUNC CORRECTING DECISION AND ORDER

 

Decision and Order issued November 1, 2011, is corrected nunc pro tunc as follows:

1.On Page 2 – FACT 4. Subject Property.The number B00321808 is stricken and the number B00358680 is inserted in lieu thereof; and

2.On Page 6 – ORDER.In the second paragraph, second line the number B00321808 is stricken and the number B00358680 is inserted in lieu thereof.

In all other respects said Decision and Order is affirmed as issued.

SO ORDERED November 15, 2011.

STATE TAX COMMISSION OF MISSOURI

<v:shapetype
id=”_x0000_t75″ coordsize=”21600,21600″ o:spt=”75″ o:preferrelative=”t”
path=”m@4@5l@4@11@9@11@9@5xe” filled=”f” stroked=”f”>

<v:shape id="_x0000_i1025" type="#_x0000_t75" style='width:164.25pt;
height:43.5pt’>

W. B. Tichenor

Senior Hearing Officer

 

 

DECISION AND ORDER

 

HOLDING

 

Assessment by Assessor that subject property was not tax exempt sustained by the St. Louis County Board of Equalization is SET ASIDE.Hearing Officer finds subject property to be exempt under Section 137.100(5).

Complainant appeared by Counsel, Tarun B. Rana, St. Louis, Missouri.

Respondent appeared by Counsel, Stephanie Hill, Assistant County Counselor.

ISSUE

Complainant appeals the decision of the St. Louis County Board of Equalization which sustained the Assessor’s assessment of the Complainant’s personal property.The Commission takes this appeal to determine whether the subject property (an automobile) is exempt from taxation under Section 137.100(5), RSMo for the tax year 2011, specifically if the subject personal property is actually and regularly used exclusively for religious worship or if the property meets the requirements of the Franciscan Tertiary case.[1]The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

FACTS

1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.A hearing was conducted on September 8, 2011, at the St. Louis County Government Center, Clayton, Missouri.

2.Assessment.Complainant filed with the Board of Equalization for exemption in 2010.However, the subject property was not owned by Complainant as of January 1, 2010, and therefore the property was not assessed in 2010.The Board of Equalization declined to exempt Complainant’s property from ad valorem taxes.

3.BOE Appeal.Petition for exemption of personal property was filed before the St. Louis County Board of Equalization on April 9, 2010, on the property under account B00358680 on the ground of religious use.Hearing was held on November 3, 2010.The Board issued its Decision Letter on November 9, 2010, denying the requested exemption.[2]

4.Subject Property.The property that is the subject of this appeal is identified in the Assessor’s records in Account No. B00321808.The property consists of a 2010 GMC Acadia SUV, VIN: 1GKLRKED2AJ243349. The automobile is titled in the name of Wondrous Grace Ministries, Inc.[3]

5.Complainant’s Evidence.Complainant filed and exchanged the following exhibits, which were received into evidence.

 

EXHIBIT

DESCRIPTION

A

Certificate of Good Standing – 5/10/11

B

Title of 2010 GMC Acadia – 5/5/10

C

Mileage Log of 2010 GMC Acadia – 5/9/10

D

Notice of Decision – BOE – 11/9/10

E

St. Louis County Personal Property Tax Bill – 11/12/10

F

Proof of Payment of Personal Property Tax Bill (Check) – 12/13/10

G

Appeal of Decision of BOE – 12/29/10

H

Written Direct Testimony – Loretta Kelley

 

6.Respondent’s Evidence.Respondent filed and exchanged the following exhibits, which were received into evidence.

EXHIBIT

DESCRIPTION

1

Notice of Hearing – St. Louis County BOE – 10/19/10

2

Petition for Exemption and Supporting Documentation

3

Field Inspection Report – 6/21/10

4

Notice of Decision – BOE – 11/9/10

5

Written Direct Testimony – Joseph Craven

6

Written Direct Testimony – Charles V. White

 

7.Not-For-Profit Corporation.The Complainant is a not-for-profit corporation under the laws of the State of Missouri.[4]Complainant’s status as a not-for-profit corporation does not establish that the subject motor vehicle is exempt from taxation under Section 137.100(5).

8.Property Used for Religious Purpose.The subject motor vehicle is used primarily for the religious purpose of providing transportation for Reverend Marcus J. Kelley, Sr., and Reverend Loretta Kelley to carry out their ministry of spreading the Gospel, counseling people, assisting those less fortunate and conducting marriages.[5]In 2010, the automobile was used 86.2% of the time for ministry purposes.[6]

 

CONCLUSIONS OF LAW

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment shown to be unlawful, unfair, arbitrary or capricious.[7]

Burden of Proof

Complainant has the burden to present substantial evidence to rebut the presumption of correct assessment by the Board of Equalization.[8]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.[9] It is well established that taxation is the rule and exemption from taxation is the exception.Exemption is not favored in the law.[10]Complainant seeks exemption of its property from taxation pursuant to Section 137.100(5):

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 religiousworship and not held for private or corporate profit, … .

 

Complainant’s substantial burden of proof has been met in the present case.

The Courts have interpreted the phrase “used exclusively” as referring to the primary and inherent use of the property, as opposed to a mere secondary and incidental use.[11]The use of the property being appealed is the main focus of any claim for exemption.[12]The primary and inherent use of the property is to provide transportation to the Reverends Kelley in order that they may carry out their religious ministry.Any personal use of the GMC automobile is a mere incidental and not primary use of the vehicle.

Franciscan Tertiary Test

An examination of the exemption issue under the Franciscan Tertiary Test provides the same conclusion that the property under appeal is not exemption under Section 137.100(5).In meeting its burden of proof that the subject property is used “exclusively for … purposes purely charitable, and not held for private or corporate profit….” Complainant must meet the three prong test set forth by the Missouri Supreme Court in Franciscan Tertiary Province v. STC.[13]The court said:

The first prerequisite for property to be exempt as charitable under §137.100 is that it be owned and operated on a not-for-profit basis.It must be dedicated un-conditionally 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 attainment of the charitable objectives of the project…. [A]n exemption will not be granted covering property which houses a business operated for the purpose of gaining a profit, even though it is turned over to a parent organization to be used for what are admittedly independently…charitable purposes.

Another prerequisite for religious exemption is that the dominant use of the property must be for the benefit of an indefinite number of people, for thepurpose, as expressed in Salvation Army, of “… bringing their hearts under the influence of … religion … .”[14]Thus 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 religious activity.[15]

 

The three tests to be met under Franciscan are:

1.Property must be owned and operated on a not-for-profit basis;

 

2.Property must be actually and regularly used exclusively for a religious purpose; and

 

3.Property must be used for the benefit of an indefinite number of persons and for society in general, directly or indirectly.

 

 


The automobile is titled in Complainant’s name, therefore it is owned on a not for profit basis.The vehicle is actually and regularly used exclusively for a religious purpose to carry on the ministry of the Kelleys as ministers of Complainant.The primary use of the vehicle is for religious purposes. The Kelleys are engaged in seeking to bring the hearts of persons under the influence of religion, i.e. Gospel of Jesus Christ.[16] There is a benefit to an indefinite number of people in how the SUV is used, since the Kelleys are traveling ministers and go to various churches to conduct their ministry.[17]

Complainant established by substantial and persuasive evidence that the subject personal property is exempt from ad valorem taxation under §137.100(5), under a religious use, and the Franciscan Test.Accordingly, the request for exemption is granted.

ORDER

The denial of exemption by the Board of Equalization for St. Louis County is SET ASIDE.

The subject property is exempt from ad valorem taxation.The 2010 GMC Acadia SUV, VIN: 1GKLRKED2AJ243349, in Assessor’s Account Number B00321808 shall be placed on the exempt property list for 2011.The Collector shall so issue the Complainant’s 2011 tax bill to reflect no taxes due for the subject motor vehicle..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.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. [18]

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 November 1, 2011.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Senior Hearing Officer

w.b.tichenor@stc.mo.gov

 

 

 

 


[1] Franciscan Tertiary Province v. STC, 566 S.W.2d 213, 223-224 (Mo. banc 1978).

 

[2] Exhibits 1, 2, 3, 4, 5 & 6

 

[3] Exhibits A, B & H

 

[4] Exhibit A

 

[5] Exhibits C & H

 

[6] Id.

 

[7] Article X, Section 14, Missouri Constitution of 1945; Sections 138.430, 138.460(2), RSMo.

[8] Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 895 (Mo. banc 1978).

 

[9] State ex rel. Council Apartments v. Leachman, 603 S.W.2d 930, 931 (Mo. 1980).

 

[10](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).

 

[11] CSCEA v. Nelson, 898 S.W.2d 547, 549 (Mo. banc 1995); Pentecostal Church of God v. Hughlett, 601 S.W.2d 666, 668 ( Mo. App. 1980);Community Memorial Hospital v. City of Moberly/Missouri U. Meth. Retire. Homes v. STC, 522 S.W.2d 745, 751 (Mo. Div 2, 1975); Salvation Army v. Hoehn et al, 188 S. W. 2d 826, 830 (Mo. banc 1945)

 

[12] Id.

 

[13] 566 S.W.2d 213, 223-224 (Mo. banc 1978);

 

[14] Salvation Army – 188 S.W.2d at 830

 

[15] Id. At 224.

[16] Exhibit H, Testimony of Reverend Loretta Kelley at hearing

 

[17] Exhibits C & H, Testimony of Reverend Loretta Kelley at hearing

 

[18] Section 138.432, RSMo.