Christian Voice of Cent. Ohio v. Testa
| Decision Date | 14 April 2016 |
| Docket Number | No. 2014–1626.,2014–1626. |
| Citation | 63 N.E.3d 1153,147 Ohio St.3d 217 |
| Parties | CHRISTIAN VOICE OF CENTRAL OHIO, Appellant, v. TESTA, Tax Commr., et al., Appellees. |
| Court | Ohio Supreme Court |
Isaac, Wiles, Burkholder & Teetor, L.L.C., and Brian M. Zets, Columbus, for appellant.
Michael DeWine, Attorney General, and Daniel G. Kim, Assistant Attorney General, for appellee Tax Commissioner.
{¶ 1} This is an appeal from a decision of the Board of Tax Appeals (“BTA”) that affirmed the tax commissioner's denial in 2011 of an exemption for real property located in Gahanna from which appellant, Christian Voice of Central Ohio, operates radio stations. Until 2007, Christian Voice operated the stations from offices located in New Albany. In 1991, the tax commissioner had granted an exemption for that property, reasoning that it was being “used for church purposes * * * under R.C. 5709.07.” In 2007, following the relocation of Christian Voice's offices to Gahanna, a complaint was filed challenging the continued exemption of Christian Voice's New Albany property. In a final determination issued in 2013, the tax commissioner denied the complaint, similarly reasoning that the property was “being used for church facilities.”
{¶ 2} Meanwhile, in 2008, Christian Voice applied for the same exemption for its Gahanna property that its New Albany property had enjoyed for 17 years. According to the application, a building constructed on the Gahanna property contains “production studios used for the origination of certain religious programming, offices, assembly rooms and a chapel.” Christian Voice again sought exemption under R.C. 5709.07(A)(2), which relieves “[h]ouses used exclusively for public worship” and attendant lands from taxation. On this occasion, the tax commissioner denied the exemption, finding “no evidence that people assemble to worship together on the subject property” and reasoning that the exemption applies only “where people gather to profess their faith or to observe and participate in religious rituals or ceremonies.”
{¶ 3} On appeal from the BTA's affirmance of the tax commissioner's final determination, Christian Voice advances three arguments: the decision to deny the exemption is unreasonable and unlawful when the primary use of the property is for public worship; the decision to ignore a property owner's prior tax exemption violates the doctrine of collateral estoppel when no material facts or circumstances changed since the prior determination; and the decision to completely deny the exemption is unreasonable and unlawful because R.C. 5713.04 permits real property to be split into exempt and nonexempt parts if the part used in the exempt manner can be precisely delineated.
{¶ 4} We agree with Christian Voice's first argument—that the primary use of the property is for public worship—and therefore reverse the decision of the BTA. Because we conclude that the BTA should have allowed the exemption under R.C. 5709.07(A)(2), the public-worship exemption, for the entire property, regardless of past determinations, we do not examine the second and third arguments asserted by Christian Voice.
{¶ 5} According to testimony presented at the BTA hearing on May 29, 2013, Christian Voice operates several1 radio stations, including most prominently WCVO 104.9 FM, “The River.” The property at issue was acquired in May 2007 to replace Christian Voice's prior New Albany offices.
{¶ 6} Christian Voice has had nonprofit status under 26 U.S.C. 501(c)(3) since it was established in 1964. There are no stockholders. According to Christian Voice's 2008 exemption application, the Gahanna property is used to produce radio programming for the purpose of “furthering the gospel of Jesus Christ through Contemporary Christian Music and Preaching and Teaching radio programs.”
{¶ 7} The property is a 2.184–acre parcel improved with a 16,783–square–foot building built in 1998. Diagrams furnished by Christian Voice to the tax commissioner show two floors plus a basement. The basement consists primarily of a meeting room, the first floor contains a chapel and offices for administrative and program staff, and the second floor contains additional offices.
{¶ 8} According to testimony and recent financial statements introduced at the BTA hearing, Christian Voice's primary sources of revenue are (1) funds received from underwriters in exchange for advertising and (2) donations. The former relates to the sale of airtime on The River. Bill Montgomery, The River's chief sales officer, testified that the sale of advertising is vital to the ministry of the station. Daniel Baughman, president and chief executive officer, testified that the station has
{¶ 9} The advertising is limited by Federal Communications Commission regulations to mentions of the supporting businesses' names and telephone numbers; advertisements may not state the prices of their services or products. Montgomery testified that the station does not air advertisements that promote alcohol, lotteries, casinos, or adult businesses such as nightclubs. Additionally, the content of advertising is monitored to ensure that it is appropriate for children to hear.
{¶ 10} About 95 percent of Christian Voice's programming consists of Christian music and 5 percent of “talk.” Todd Stach, chief creative officer, described the music as “bible verses put to music,” explaining that artists convert old hymns into contemporary songs. He also stated that most of the songs “encourag [e] a vertical relationship with God.”
{¶ 11} The River's talk segments consist of pastoral programming. John Moriarty—the station's full-time pastor, known as Pastor John—records one-minute devotional spots with contact information, inviting listeners to contact him for prayer or support. The River's disc jockeys (“DJs”) also promote Pastor John's counseling services on the air. In addition, on Sunday mornings, The River airs a three-hour syndicated program called “Keep the Faith.” Although it includes music, the program is, according to Baughman's testimony, as “close to preaching and teaching as you can be,” helping listeners “get through life['s] struggles.”
{¶ 12} Christian Voice's chapel features a collection of Christian books as well as stained-glass artwork depicting the life of Jesus Christ. Pastor John leads a prayer devotional with Christian Voice staff in the chapel every Monday, Tuesday, Thursday, and Friday morning to pray for intentions that listeners have submitted via Christian Voice's website. On Wednesdays, he holds a Bible study in the chapel for the staff. In addition, the pastor of Epic Church, a church located nearby, uses the chapel for pastoral counseling. The River airs regular announcements informing listeners that the chapel is open to them daily for private prayer.
{¶ 13} Christian Voice's basement meeting room is used regularly by groups and organizations with a religious focus, regardless of denomination. Epic Church uses the meeting room for several regular worship services, including a Sunday evening discipleship service, a Wednesday youth service, and a monthly service for the church's leadership team. Alpha, a group described as an introduction to the Christian faith, also uses the meeting room. Boy Scout meetings are also held in this space. Christian Voice does not charge any of these organizations for their use of its chapel or meeting room.
{¶ 14} The River is active in community outreach. Pastor John testified that part of The River's ministry is doing work for the homeless—for example, by coordinating groups of volunteers at local food pantries. DJ Mary Harris testified that her off-air duties involve community outreach with various nonprofit organizations and individuals in need. She shared stories of locating a refrigerator and delivering it to a listener's friend, collecting donations for a schoolteacher whose students needed clothes and shoes and delivering supplies to them, and collecting items for a family whose home had been destroyed by a fire. She also discussed the station's involvement with an organization that assists women recovering from sexual trauma and drug addiction. David Baker, The River's chief administrative finance officer, discussed the station's material assistance to local crisis-pregnancy centers.
{¶ 15} Christian Voice filed its application for exemption for tax year 2008 on June 17, 2008. After the filing and the submission of requested supplemental information, the tax commissioner issued his determination on May 18, 2011. The commissioner cited BTA decisions holding that radio stations that broadcast religious programming do not equate to “[h]ouses used exclusively for public worship” under R.C. 5709.07(A)(2). He also found that there was “no evidence that people assemble to worship together on the subject property used exclusively as a radio station.” The commissioner denied the exemption claim, and Christian Voice appealed to the BTA.
{¶ 16} The BTA held a hearing at which Christian Voice presented ten witnesses and six exhibits; the tax commissioner offered no witnesses and introduced exhibits consisting mostly of financial statements and tax filings.
{¶ 17} The BTA issued its decision on August 22, 2014. The BTA acknowledged Christian Voice's reliance on World Evangelistic Ent. Corp. v. Tracy, 96 Ohio App.3d 78, 644 N.E.2d 678 (2d Dist.1994), but distinguished that case as involving a station that was supported fully by donations without “advertising/underwriting” and that featured preaching and religious teaching on the air. BTA No. 2011–1446, 2014 Ohio Tax LEXIS 3942, 7–10 (Aug. 22, 2014). Under the circumstances, the BTA concluded that “the activities that occur at the subject property do not rise to [the] level” of “ ‘the open and free celebration or observance of the rites and ordinances of a religious...
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Willacy v. Cleveland Bd. of Income Tax Review
...gave them to her.{¶ 21} Willacy also argues that we validated her collateral-estoppel theory in Christian Voice of Cent. Ohio v. Testa , 147 Ohio St.3d 217, 2016-Ohio-1527, 63 N.E.3d 1153. But we did no such thing. In fact, we expressly declined to address the taxpayer's collateral-estoppel......