Benedictine Sisters of Sacred Heart v. Department of Revenue

• Decision Date: 13 May 1987
• Docket Number: No. 2-86-0949,2-86-0949
• Citation: 508 N.E.2d 470,155 Ill.App.3d 325,108 Ill.Dec. 309
• Parties: , 108 Ill.Dec. 309 BENEDICTINE SISTERS OF the SACRED HEART, Plaintiff-Appellee, v. DEPARTMENT OF REVENUE, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 470

508 N.E.2d 470

155 Ill.App.3d 325, 108 Ill.Dec. 309

BENEDICTINE SISTERS OF the SACRED HEART, Plaintiff-Appellee, v. DEPARTMENT OF REVENUE, Defendant-Appellant.

No. 2-86-0949.

Appellate Court of Illinois Second District.

May 13, 1987.

Neil F. Hartigan, Bret A. Rappaport, Roma Jones-Stewart, Attys. Gen., Chicago, for defendant-appellant.

Righeimer Martin Bridewell & Cinguino, Michael E. Kerns, Frank R. Martin, Chicago, for plaintiff-appellee.

Justice REINHARD delivered the opinion of the court:

Defendant, the Illinois Department of Revenue (Department), appeals from the judgment of the circuit court of DuPage County reversing the Department's denial of a religious use property tax exemption for a parcel of real estate owned by plaintiff, the Benedictine Sisters of the Sacred Heart (Benedictine Sisters). The single issue on appeal is whether the trial court erred in determining that the parcel in question, which contains three homes used as residences for the convent's three caretakers, meets the requirements for exempt status as set forth in section 19.2 of the Revenue Act of 1939 (Ill.Rev.Stat.1981, ch. 120, par. 500.2).

On July 19, 1982, the Board of Review of DuPage County denied the exemption for the parcel. The Department agreed with the denial, and the Benedictine Sisters requested an administrative hearing. Sister Mary Regina Dubina, treasurer of the Benedictine Sisters, testified at the hearing before the Department's hearing officer, and her testimony is undisputed. The Benedictine convent was built in 1910. It consists of a main four-story building, a powerhouse containing furnaces and boilers, two garages, a shed, three residences, and a cemetery. The 47-acre complex is owned by the Benedictine Sisters, a semi-contemplative order, and includes housing for up to 83 members. Some of the members work off the premises as teachers, nurses, religious education coordinators, and youth and campus ministers. The majority of the members, however, are retired or semi-retired and live full-time on the convent grounds and help carry on the duties of the convent.

The parcel of real estate at issue here is part of the complex and contains three single-family homes which were built in the 1930's. The convent's three caretakers live in the three homes, at least one of them with his family. The auto mechanic repairs the cars, puts gas and oil in them, prepares the machinery, and also helps with the ground work. The chief engineer takes care of building repairs, the heating system, and emergencies such as electrical failure, plumbing problems, and problems with the elevator. The grounds keeper clears the roadways of snow in the winter and also mows the lawn, cuts down trees, and takes care of the shrubbery and the cemetery. All three men work five days a week, eight hours a day, and are on 24-hour call for emergencies. The chief engineer has an alarm in his home to alert him of any problems in the powerhouse. All three men are required to live on the grounds by the Benedictine Sisters as a condition of their employment and live rent-free as part of their compensation. The homes do not produce any income for the convent.

Sister Dubina also testified that there are no members of the order who would be able to do the work performed by the three caretakers. She stated that the caretakers were required to live on the grounds because the members of the order would be helpless without them as they are needed for emergencies that arise.

Following the administrative hearing, the Department's hearing officer determined that the three homes on the parcel in issue were used solely for residential purposes by the three caretakers who were not in any way involved in the religious activities of the Benedictine Sisters. Therefore, the parcel was not used for religious purposes during 1982 and did not qualify for exemption.

The Benedictine Sisters filed a complaint for administrative review. After reviewing the undisputed facts presented to the hearing officer, the trial court reversed the Department's decision as contrary to law, against the manifest weight of the evidence, and as arbitrary and capricious. Following the Department's motion for rehearing, the trial court specifically found that the parcel was exempt from real estate taxation as property used exclusively for religious purposes, and the Department appealed.

Because the relevant facts are undisputed, the issue of whether the property here is exempt is a question of law. (Cook County Masonic Temple Association v. Department of Revenue (1982), 104 Ill.App.3d 658, 660, 60 Ill.Dec. 341, 432 N.E.2d 1240; see also Caterpillar Tractor Co. v. Department of Revenue (1963), 29 Ill.2d 564, 566, 194 N.E.2d 257.) Thus, the decision as to whether the property is exempt "depends solely upon an application of the appropriate legal standard to the undisputed facts" (Illinois Central Gulf R.R. Co. v. Department of Local Government Affairs (1983), 95 Ill.2d 111, 129, 69 Ill.Dec. 98, 447 N.E.2d 315), and this court's role is to determine whether the trial court properly found that the property in question was entitled to tax-exempt status. See Northwestern Memorial Foundation v. Johnson (1986), 141 Ill.App.3d 309, 311, 95 Ill.Dec. 688, 490 N.E.2d 161.

It is a well-settled rule of law in Illinois that all property is subject to taxation, unless specifically exempted by statute. (Rogers Park Post No. 108 v. Brenza (1956), 8 Ill.2d 286, 289-90, 134 N.E.2d 292; Metropolitan Sanitary District v. Rosewell (1985), 133 Ill.App.3d 153, 155, 88 Ill.Dec. 492, 478 N.E.2d 1100.) The Illinois Constitution provides that exemptions may be made only for property "used exclusively" for certain purposes, stating:

"[t]he General Assembly by law may exempt from taxation only the property of the State, units of local government and school districts and property used exclusively for agricultural and horticultural societies, and for school, religious, cemetery and charitable purposes." (Ill. Const.1970, art. IX, § 6.)

Section 19 of the Revenue Act of 1939 (Act) states that "[a]ll property described in sections 19.1 through 19.24 to the extent therein limited, is exempt from taxation" (footnote omitted) (Ill.Rev.Stat.1981, ch. 120, par. 500), and the applicable statute in 1982 at the time the tax exemption was denied, section 19.2 of the Act, described property exempt because of its use for religious purposes as follows:

"[a]ll property used exclusively for religious purposes, or used exclusively for school and religious purposes, or for orphanages and not leased or otherwise used with a view to profit, including all such property owned by churches or religious institutions or denominations and used in conjunction therewith as parsonages or other housing facilities provided for ministers (including bishops, district superintendents and similar church officials whose ministerial duties are not limited to a single congregation), their spouses, children and domestic employees, performing the duties of their vocation as ministers at such churches or religious institutions or for such religious denominations, and including the convents and monasteries where persons engaged in religious activities reside." Ill.Rev.Stat.1981, ch. 120, par. 500.2.

Statutes granting tax exemptions must be construed strictly in favor of taxation (Board of Certified Safety Professionals v. Johnson (1986), 112 Ill.2d 542, 547, 98 Ill.Dec. 363, 494 N.E.2d 485; People ex rel. Kassabaum v. Hopkins (1985), 106 Ill.2d 473, 476, 88 Ill.Dec. 606, 478 N.E.2d 1332), and the party claiming an exemption has the burden of proving clearly and conclusively that the property in question falls within the terms of the statute under which the exemption is claimed. (Board of Certified Safety Professionals v. Johnson (1986), 112 Ill.2d 542, 547, 98 Ill.Dec. 363, 494 N.E.2d 485; Coyne Electrical School v. Paschen (1957), 12 Ill.2d 387, 390, 146 N.E.2d 73.) Every presumption is against the intention of the State to exempt property from taxation (United Air Lines, Inc. v. Johnson (1981), 84 Ill.2d 446, 456, 50 Ill.Dec. 631, 419 N.E.2d 899; Antioch Missionary Baptist Church v. Rosewell (1983), 119 Ill.App.3d 981, 982, 75 Ill.Dec. 506, 457 N.E.2d 500), and doubts concerning the applicability of the exemptions are to be resolved in favor of taxation. United Air Lines, Inc. v. Johnson (1981), 84 Ill.2d 446, 455, 50 Ill.Dec. 631, 419 N.E.2d 899; In re Mi-Jack Products, Inc. (1985), 136 Ill.App.3d 721, 726, 91 Ill.Dec. 434, 483 N.E.2d 920.

Section 19.2 "allows an exemption only for 'property used exclusively for religious purposes.' " (McKenzie v. Johnson (1983), 98 Ill.2d 87, 96, 74 Ill.Dec. 571, 456 N.E.2d 73.) Property satisfies the exclusive-use requirement of the property tax exemption statutes if it is primarily used for the exempted purpose, even though it is also used for a secondary or incidental purpose. McKenzie v. Johnson (1983), 98 Ill.2d 87, 98, 74 Ill.Dec. 571, 456 N.E.2d 73; Evangelical Hospital Association v. Novak (1984), 125 Ill.App.3d 439, 441, 80 Ill.Dec. 640, 465 N.E.2d 986.

Here, it is clear that the parcel containing the three caretakers' residences is not primarily used for religious purposes. Although the Illinois courts have not articulated an all-inclusive definition of what constitutes a religious purpose (see Scripture Press Foundation v. Annunzio (1953), 414 Ill. 339, 352, 111 N.E.2d 519; People ex rel. Carson v. Muldoon (1922), 306 Ill. 234, 238, 137 N.E. 863; Evangelical Teacher Training Association v. Novak (1983), 118 Ill.App.3d 21, 24-25, 73 Ill.Dec. 739, 454 N.E.2d 836), section 19.2 specifically exempts certain "housing facilities provided for ministers * * *, their spouses, children and domestic employees" as well as "convents and monasteries where persons engaged in religious activities reside." Ill.Rev.Stat.1981, ch. 120, par. 500.2.

The supreme court recently stated in McKenzie v. Johnson...