Community Drama Ass'n of Des Moines v. Iowa State Tax Commission, 50305

• Decision Date: 02 May 1961
• Docket Number: No. 50305,50305
• Citation: 252 Iowa 854,109 N.W.2d 23
• Parties: COMMUNITY DRAMA ASSOCIATION OF DES MOINES, Iowa, Appellee, v. IOWA STATE TAX COMMISSION and John J. O'Connor, Leon W. Miller and A. L. George, as Members of the Iowa State Tax Commission, Appellants.
• Court: Iowa Supreme Court

Page 23

109 N.W.2d 23

252 Iowa 854

COMMUNITY DRAMA ASSOCIATION OF DES MOINES, Iowa, Appellee, v. IOWA STATE TAX COMMISSION and John J. O'Connor, Leon W. Miller and A. L. George, as Members of the Iowa State Tax Commission, Appellants.

No. 50305.

Supreme Court of Iowa.

May 2, 1961

Evan Hultman, Atty. Gen., and Gary S. Gill, Special Asst. Atty. Gen., for appellants.

Dickinson, Throckmorton, Parker, Mannheimer & Raife, Des Moines, for appellee.

SNELL, Justice.

This is an action to determine the liability of Community Drama Association of Des Moines under the Iowa Sales Tax Law, I.C.A. § 422.42 et seq. The facts are not in dispute.

I. Appellants are the Iowa State Tax Commission and the members thereof. They will be referred to as the commission.

Appellee is Community Drama Association of Des Moines, a corporation not for pecuniary profit organized under the laws of Iowa. It will be referred to as appellee. It is also called the playhouse. Its amended Articles of Incorporation provide in part: 'The business and objects of the association shall be to conduct a school or drama association, producing amateur theatrical productions for educational, civic and benevolent purposes.'

Appellee presents theatrical productions, play readings, children's classes, workshops and demonstrations, children's productions and lectures in the field of theatre. Appellee sells memberships which entitle purchasers to membership in the corporation, participation in the voting for directors and admission to all plays presented during the year.

Memberships are now $8 a year.

Individual admissions are $2 on weekdays and $2.50 on Friday, Saturday and Sunday nights; student tickets are $1 per seat, and tickets for the children's productions are 50 cents each.

Appellee has a paid managing director, a paid technical director and a paid children's director. All other participants in the activities of appellee are volunteers serving without pay.

The managing director coordinates and supervises the activities of the playhouse; he recruits and directs the cast.

The technical director designs, instructs and supervises the building, painting and execution of scenery for all productions.

The children's director instructs the children in the workshop classes and directs children's theatre plays.

Appellee presents six major play productions a year with 14 performances of each production and 84 nights of theatre each year. Auditions for the production are not limited to playhouse members.

Children's workshop classes are tuition-paying classes for work in creative drama, speech correction or acting. Children participating range in age from 4 to 14. A special speech therapist is available to assist in addition to regular classroom work. No formal grades or degrees are awarded.

There are two children's productions a year with open tryouts available to any child in the area.

Adult education classes are cosponsored with the Department of Adult Education of Des Moines Public Schools. Personnel of the playhouse teach these classes. Classes are offered without tuition.

Lectures by nationally known people in the theatre have been sponsored by appellee. These lectures are open to the public.

A dramatic library is maintained available to the public without charge.

Of the members, between 500 and 1000 participate in the activities.

Appellee's income is derived from the major productions, children's theatre, advertisements in play programs, refreshments sold, rentals from the sale of the house for special productions and some interest received from money on deposit.

Productions having historical value as well as other subject matter have been made available without charge to students of high schools and parochial schools in the Des Moines area. Authentic costumes for such plays have been made available.

Quite often the children's classes produce a play that is presented at hospitals and charitable institutions.

Workshops are conducted with participation of leaders from religious and drama groups, Girl Scouts, Boy Scouts and Campfire Girls.

The playhouse presents a series of play readings in which the participants read the lines of the actors without memorizing. This makes possible participation by those who do not have time to devote to a regularly produced play.

Membership in the playhouse is not a prerequisite to participation in playhouse activities.

There has never been any distribution of property to any member of the playhouse.

All of appellee's income is exempt from Federal income tax and appellee is included in the list of organizations described in the Internal Revenue Code of the United States as an organization contributions to which are deductible for Federal income tax purposes.

There is regular attendance at the plays by drama classes from Simpson, Grinnell and Grandview Colleges, and the playhouse program is a part of the curriculum in the Drake University educational program.

A professor in the Speech Department, College of Fine Arts, State University of Iowa, experienced in the work of community theatres and with a thorough background of research in his field, testified: 'The capital investment in the amateur theatre receives dividends of educational, cultural and social values. * * * The well-administered and intelligently directed Community Theatre has been found to be an important part of community life. * * * It is not a theatre limited to the talented artistic few, but is instead a common medium of communal life. * * * The active participants in the community theatre * * * receive benefits from the theatre in propertion to the amount of work accomplished by the individual in the theatre. * * * The value of a community theatre is measured by its service to the community, and the theatre by performing services justifies its existence as a social institution. * * *

'* * * in general educators, all educators say education is an ongoing process: It never stops. You may learn different ways under different kinds of instructions * * *.'

After a thorough discussion of all of the aspects involved in community theatre activities, the professor stated that the appellee's activities were educational.

During the war years appellee contributed to the war effort through the presenting of skits, radio programs, personal appearances for Red Cross and bond drives and free performances for the Wacs and soldiers stationed near by. Since then, plays have been presented at Veterans Hospital. Appellee has received an award from the Adult Education Department of the public school system for contributing to the adult education program.

A professor of English at Drake University, with his particular area of emphasis Modern Drama and History of the English Drama, discussed the program of community theatres at length and the value to the community, and supported appellee's contention as to the educational value of a community theatre. In answer to the question: 'Is education a process that continues after you graduate from college?' he answered, 'It often begins then.'

The director of the Department of Adult Education of Des Moines Public Schools testified as to appellee's contribution and cosponsorship of classes in the adult education program and stated that if there were not a playhouse program, there would be a gap in adult education in the community.

An assistant professor of Drama at Drake University, with extensive experience as an educator, testified as to the value of the children's program and stated that community theatres are playing a distinct role in broadening and teaching culture to the peoples of the communities in which they are functioning and provide many forms of adult education, avocational, recreational, remedial and social.

In all, eleven witnesses thoroughly familiar with the purposes, activities, programs and results of appellee, testified in support of appellee's position.

The evidence in behalf of defendant commission consisted of testimony of field auditors as to the receipts of appellee. No evidence was offered to refute the claim as to the educational activities of the appellee.

II. In closing the argument for appellee, counsel appropriately quotes from the immortal bard, William Shakespeare: 'The play's the thing wherein I'll catch the conscience of the king.'

As did Shakespeare, appellee hopes to appeal to the conscience of the court so that it may carry on its activities in full without hindrance or depreciation at the hands of the tax gatherer.

To all of which the commission replies that while there may be education incident to the program of appellee, the participants in the activities of appellee are there primarily for fun, amusement and recreation and, as such, should contribute to the public revenue. Should fun and entertainment, even though educational, be taxed to help the state treasury meet the increasing demands for support and relief? This is not a question for us to answer. It is not for the courts to say who should or should not be taxed, nor who should be granted special...