Summary
describing the “factual determination” of the Board of Tax Appeals in deciding whether the corporation was a church for purposes of the sales-tax statute
Summary of this case from Christian Voice of Cent. Ohio v. TestaOpinion
No. 71-346
Decided February 16, 1972.
Taxation — Sales tax — Exemptions — R.C. 5739.02(B)(12) — Sales of personal property to church — Nonprofit religious corporation exempt, when — Operation of radio facility — Exempt status of corporation not affected, when — Evidence.
Where a nonprofit religious corporation affirmatively shows that it otherwise has the essential attributes of a church within the meaning of R.C. 5739.02(B)(12), it may not be denied exempt status for the reason that it operates a radio facility in conjunction with and in furtherance of its religious and charitable activities.
APPEAL from the Board of Tax Appeals.
This is an appeal by the Tax Commissioner of Ohio from a decision of the Board of Tax Appeals excepting certain purchases by the appellee from Ohio sales and use taxes. The decision of the board was predicated upon a factual determination that the appellee qualifies as a "church" within the contemplation of R.C. 5739.02 (B)(12).
The Maumee Valley Broadcasting Association is a nonprofit religious corporation organized under the laws of the state of Ohio. It owns a ten-acre tract of land upon which is located a broadcasting studio, and an auditorium which will accommodate approximately 120 people. The title to the real estate is subject to reservations and restrictions limiting its use to those of a public charity and of a church.
The evidence discloses in some detail that the appellee conducts religious activities both on its premises and by use of its broadcasting facilities. It renders basic religious services and programs to the general public. It serves missions, engages in child evangelism work, establishes bible clubs, serves shut-in listeners, gathers food and clothing for distribution through authorized agencies, cooperates in various ways with recognized charitable and health organizations, provides counselling services, and promotes educational programs for various bible and religious schools.
The appellee's operation is interdenominational, and its facilities are used by the community for church services and related programs. It has a full-time staff which includes two ordained ministers, and the entire staff provides pastoral care, engages in gospel preaching, conducts worship services and participates generally in other routine church activities.
The appellee broadcasts over a 20- to 60-mile area. On a 24-hour-a-day basis, 24 percent of its broadcast programs are wholly religious, 55 percent provide religious music, and the balance pertain generally to health and education.
The appellee's articles of incorporation compare favorably with similar articles of other churches, and provide, among other things, that its purpose is to exalt the Lord Jesus Christ and to maintain facilities for the worship of God and for the teaching and preaching of the Gospel. The articles provide further that "the assets of this corporation are dedicated for charitable purposes and therefore upon dissolution any remaining assets must be distributed for charitable purposes and for the general purposes for which this corporation was organized."
The evidence discloses further that the appellee has been granted exempt status by the internal revenue service and by all licensing musical organizations. Its real estate was previously exempt from taxation by the Board of Tax Appeals, and this finding was affirmed by the Lucas County Court of Appeals.
The appellee has a board of directors consisting of thirteen members, no two of whom can belong to the same denomination. Its only source of revenue is from donations, gifts, and contributions. About 80 percent of its gross receipts comes from approximately five hundred people, called "faith partners," who contribute financial support on a monthly basis.
Mr. Theodore Markwood, for appellee.
Mr. William J. Brown, attorney general, and Mr. Dwight C. Pettay, Jr., for appellant.
As a whole, the evidence presented to the Board of Tax Appeals may be characterized as candid and comprehensive. It lays open the internal operation of the corporation, and significantly, the record reflects no evidence, or any suggestion, that the religious operation of the appellee was prompted by a profit motive or initiated for material gain.
The record is, of course, subject to the usual guidelines established in tax cases, one of which provides that statutes relating to an exemption from taxation must be strictly construed. National Tube Co. v. Glander (1952), 157 Ohio St. 407. However, it is not the function of this court to substitute its judgment for that of the Board of Tax Appeals on factual issues, but only to determine from an examination of the record whether the decision reached by the board is unreasonable or unlawful. Hercules Galion Products v. Bowers (1960), 171 Ohio St. 176.
In challenging the exemption, the Tax Commissioner argues that the appellee is not a church but a radio station, and in support of this argument, he has turned to certain definitions of the word "church," as contained in Black's Law Dictionary.
But the appellee has likewise submitted various accepted definitions of the same word to support its position, and this multifarious use of the word "church" by the parties themselves tends to show that it is not susceptible to a precise definition.
With a view to substance, we are of the opinion that the appellant's isolation of the radio station from the total picture is unwarranted by the evidence in this case. The evidence amply shows that this facility merely implements the religious objectives of the organization. The character of any nonprofit corporation must be found in its motives, its charter, its purposes, its methods, and its operation. Here, the appellee, like most churches, has dedicated all its land and buildings to charity and religion, and the operation of the radio station is not alone sufficient to change the underlying foundation of the corporation. Within the scope of common understanding, the appellee has demonstrated by evidence the necessary attributes of a church.
The Tax Commissioner questions further the propriety of the exemption for the reason that the appellee does not have a body of communicants "gathered together in an order, or united under one form of government." Essentially, this contention is directed to the interdenominational make-up of the organization.
Admittedly, the appellee is not without some unique features, but having exhibited the essential qualities of a church, and all other things being substantially equal within the contemplation of R.C. 5739.02 (B)(12), we perceive no valid objection to its exempt status merely because it cannot, in a traditional sense, claim a certain congregation. In other words, a church of the type "that finds with joy the grain of gold in every creed, and floods with light and love the germs of good in every soul" cannot reasonably be denied exempt status for that reason alone.
We are of the opinion that the record in this case is fully supportive of the factual determination of the Board of Tax Appeals, and its decision must therefore be affirmed.
Decision affirmed.
O'NEILL, C.J., CORRIGAN, STERN and LEACH, JJ., concur.
HERBERT, J., concurs in the syllabus.
SCHNEIDER, J., dissents.
KERNS, J., of the Second Appellate District, sitting for DUNCAN, J. JUDGE KERNS of the Court of Appeals was, pursuant to Section 2 of Article IV of the Constitution of Ohio, duly directed by the Chief Justice "to sit with the justices of the Supreme Court in the place and stead of" JUSTICE DUNCAN and JUDGE KERNS did so and heard and considered this cause prior to the resignation of JUSTICE DUNCAN on November 28, 1971.
I cannot agree that appellee's operations, however meritorious they are, constitute a "church" as the General Assembly must have used that term. Appellee has no doctrine and no government for its members with its concomitant, discipline.
It may well be operated for a "charitable purpose," in the broad sense, but the Board of Tax Appeals properly rejected that contention for the reason that, for a sales tax exemption, the term is most narrowly and specifically defined.