Cantigny Trust v. Department of Revenue

Decision Date30 June 1988
Docket NumberNo. 2-87-0963,2-87-0963
Citation122 Ill.Dec. 259,526 N.E.2d 518,171 Ill.App.3d 1082
Parties, 122 Ill.Dec. 259 CANTIGNY TRUST, Plaintiff-Appellee, v. THE DEPARTMENT OF REVENUE, Defendant-Appellant.
CourtUnited States Appellate Court of Illinois

Neil F. Hartigan, Atty. Gen., Bret A. Rappaport, Asst. Atty. Gen., Chicago, Shawn W. Denney, Robert J. Ruiz, Sols. Gen., for Illinois Dept. Revenue.

Edward G. Proctor, Thomas F. Ging, Isham, Lincoln & Beale, Chicago, for Cantigny Trust.

Justice DUNN delivered the opinion of the court:

Defendant, the Department of Revenue (Department), appeals the judgment of the circuit court of Du Page County granting tax-exempt status to five parcels of land owned by the plaintiff, Cantigny Trust. The residences house the director of security and groundskeepers of the park operated by the trust. On appeal, the Department asserts that the residences are not reasonably necessary to the operation of the park.

Plaintiff operates Cantigny Park and Gardens, located on the estate of Colonel Robert R. McCormick in Du Page County. The park contains two museums, gardens, nature areas with trails, campgrounds and wildlife preserves, and the gardens are open to the public year-round. Boy Scouts often camp on the grounds. The Department does not dispute the general charitable nature of Cantigny Trust. The instant appeal relates only to the five parcels occupied by the residences.

On July 1, 1986, the Department issued its final administrative decision for the tax year 1984, granting tax-exempt status to the entire park except for 200 acres used for farming and the five residences. The Department reached the same result for tax year 1985. Plaintiff filed complaints for administrative review of both decisions in the circuit court of Du Page County, which consolidated the actions. The court affirmed the portion of the Department's decision denying tax-exempt status for the farmed parcels, but reversed the portion of the Department's decision denying exemptions for the residences. The Department appeals the court's order granting exemptions for the five residences. Plaintiff does not appeal the portion of the judgment relating to the farmed parcels, and that issue is not before us.

The following facts regarding the residences were adduced at the administrative hearing. The first of the houses at issue is occupied by J. Knox, the park's director of security, and his wife and child. He keeps a radio in the house, which is activated if an alarm in one of the museums is tripped. He keeps the radio on at all times that scouts are camping in the park.

The second house in question is occupied by Narcisco Felix, the park's head groundskeeper. The house is located near a greenhouse where plants are stored for the winter. Felix watches the greenhouse in winter and is responsible for clearing snow from the roads and paths in the park. He supervises the heating of the greenhouse 24 hours a day during the winter. On past occasions he has been required to activate manually the emergency heating system.

The third house at issue is the residence of the head maintenance man for the museums and other buildings, Mr. Smith. In addition to maintaining the buildings, Smith's duties include opening the museums in the morning, fixing the public restrooms if necessary, assisting Felix with the greenhouse and serving as a backup for Knox. The remaining two residences house assistant groundskeepers.

All five employees are required to live on the grounds as a condition of their employment and are on 24-hour call in case of an emergency, such as a fire or break-in. However, none of the employees performs any of his duties in the houses; they are used strictly as residences. All of the employees have at some time responded to fire or burglar alarms. Plaintiff's brief states, "If Cantigny did not have employees residing on the grounds, it would incur substantial additional expense in hiring more employees."

Both parties correctly recognize that the facts are undisputed. Therefore, the issue of whether the property is exempt is a question of law, the resolution of which depends solely upon the application of the appropriate legal standards to those facts, and this court must decide whether the trial court properly found that the property was exempt from taxation. Evangelical Alliance Mission v. Department of Revenue (1987), 164 Ill.App.3d 431, 439, 115 Ill.Dec. 492, 517 N.E.2d 1178; Benedictine Sisters of the Sacred Heart v. Department of Revenue (1987), 155 Ill.App.3d 325, 328, 108 Ill.Dec. 309, 508 N.E.2d 470.

All property is subject to taxation unless a statute specifically exempts it. The constitutional provision authorizing the legislature to exempt certain specified property from taxation states, in relevant part:

"The General Assembly by law may exempt from taxation * * * property used exclusively for * * * charitable purposes." (Ill. Const.1970, art. IX, § 6.)

Section 19 of the Revenue Act of 1939 implements this constitutional provision by providing that all property described in sections 19.1 through 19.24 of the Act is exempt from taxation. (Ill.Rev.Stat. 1985, ch. 120, par. 500.) Section 19.7 of the Act exempts from taxation:

"All property of institutions of public charity, all property of beneficent and charitable organizations, whether incorporated in this or any other state of the United States * * * when such property is actually and exclusively used for such charitable or beneficent purposes, and not leased or otherwise used with a view to profit * * *." (Ill.Rev.Stat. 1985, ch. 120, par. 500.7.)

Certain well-established principles govern the construction of the statute. Statutes granting tax-exemptions are construed strictly in favor of taxation; the party claiming the exemption has the burden of proving clearly and conclusively that the property in question falls within the terms of the exemption statute. ( Evangelical Alliance, 164 Ill.App.3d at 440, 155 Ill.Dec. 492, 517 N.E.2d 1178; Wheaton College v. Department of Revenue (1987), 155 Ill.App.3d 945, 947, 108 Ill.Dec. 559, 508 N.E.2d 1136.) Every presumption is against the State's intent to exempt property from taxation, and doubts concerning the applicability of an exemption are resolved in favor of taxation. Rotary International v. Paschen (1958), 14 Ill.2d 480, 487, 153 N.E.2d 4; Benedictine Sisters, 155 Ill.App.3d at 328, 108 Ill.Dec. 309, 508 N.E.2d 470.

Section 19.7 allows exemptions only for property used exclusively for charitable purposes. (Ill.Rev.Stat.1985, ch. 120, par. 500.7.) Property satisfies this exclusive-use requirement if it is primarily used for the exempted purpose, even though it may also be 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; Methodist Old Peoples Home v. Korzen (1968), 39 Ill.2d 149, 157, 233 N.E.2d 537.) In the analogous case of property used as a residence for school personnel, the supreme court stated:

"Exemption will be sustained if it is established that the property is primarily used for purposes which are reasonably necessary for the accomplishment and fulfillment of the educational objectives, or efficient administration, of the particular institution." MacMurray College v. Wright (1967), 38 Ill.2d 272, 278, 230 N.E.2d 846.

This court has interpreted the "reasonably necessary" test of MacMurray to require that residential property is exempt from taxation "only if one of two conditions is met: Either (1) the resident-employee performs an exempt function, such as educational or religious duties * * *; or (2) the resident-employee performs his duties in furtherance of the institution's exempt purpose in the building." Lutheran Child & Family Services v. Department of Revenue (1987), 160 Ill.App.3d 420, 425, 112 Ill.Dec. 173, 513 N.E.2d 587.

In Lutheran Child, this court found that the residence of a maintenance man on the grounds of a private school was not exempt from taxation since the maintenance man performed no educational duties and the building was never used for any educational purpose. ( Lutheran Child, 160 Ill.App.3d at 426, 112 Ill.Dec. 173, 513 N.E.2d 587.) Similarly, a second building used as a staff residence also did not qualify for exemption because the employees were not required by the nature of their duties to live on the premises and no educational functions took place in the building. Lutheran Child, 160 Ill.App.3d at 426, 112 Ill.Dec. 173, 513 N.E.2d 587.

In another recent case, this court held that the residences of the mechanic, chief engineer and groundskeeper of a convent were not exempt. The employees were clearly not ministers "performing the duties of their vocation" (Ill.Rev.Stat.1985, ch. 120, par. 500.2), so that the residences were not used exclusively for religious purposes. Benedictine Sisters, 155 Ill.App.3d at 330-31, 108 Ill.Dec. 309, 508 N.E.2d 470; see also People ex rel. Kelly v. Avery Coonley School (1957), 12 Ill.2d 113, 116-17, 145 N.E.2d 80; Annot., 15 A.L.R.2d 1064, 1073-74 (1951).

By contrast, in Evangelical Alliance Mission v. Department of Revenue (1988), 164 Ill.App.3d 431, 115 Ill.Dec. 492, 517 N.E.2d 1178, we upheld the exemption for an apartment building occupied by furloughed missionaries. The ministry which sponsored the missionaries required them to return for "debriefing" every three years, and the apartment building was located next to the ministry's headquarters. Thus, the missionaries were clearly ministers performing the duties of their vocation, and their duties required them to live in close proximity to the ministry headquarters. Evangelical Alliance, 164 Ill.App.3d at 443, 115 Ill.Dec. 492, 517 N.E.2d 1178; see also Illinois Conference of the United Church of Christ v. Department of Revenue (1988), 165 Ill.App.3d 200, 116 Ill.Dec. 133, 518 N.E.2d 755.

Generally, the same analysis is used to determine charitable exemptions as religious exemptions. (Fairview Haven...

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