First Presbyterian Church v. Zehnder

• Decision Date: 17 August 1999
• Docket Number: No. 2-98-0807.,2-98-0807.
• Citation: 306 Ill. App.3d 1114,715 N.E.2d 1209,240 Ill.Dec. 152
• Parties: FIRST PRESBYTERIAN CHURCH OF DIXON, Plaintiff-Appellee, v. Kenneth ZEHNDER, Director of Revenue, et al., Defendants-Appellants (Tom Foster, Supervisor of Assessments, et al., Defendants).
• Court: United States Appellate Court of Illinois

715 N.E.2d 1209

306 Ill. App.3d 1114

240 Ill.Dec. 152

FIRST PRESBYTERIAN CHURCH OF DIXON, Plaintiff-Appellee, v.Kenneth ZEHNDER, Director of Revenue, et al., Defendants-Appellants (Tom Foster, Supervisor of Assessments, et al., Defendants).

No. 2-98-0807.

Appellate Court of Illinois, Second District.

August 17, 1999.

James E. Ryan, Attorney General, Chicago, Barbara A. Preiner, Wheaton, Michael A. Rakov, Assistant Attorney General, Chicago, for Illinois Department of Revenue, Kenneth Zehnder, Director.

Charles T. Beckman, Megan G. Heeg, Ehrmann, Gehlbach, Beckman, Badger & Lee, Dixon, for First Presbyterian Church of Dixon.

Justice McLARENdelivered the opinion of the court:

Defendants, the Department of Revenue and Kenneth Zehnder, Director of Revenue, appeal from the trial court's order reversing the Department's decision denying plaintiff, First Presbyterian Church of Dixon (First Presbyterian), an exemption from real property taxes for 1992 on a parcel of property.We affirm.

First Presbyterian owns a parcel of property located at 519 Highland Avenue in Dixon.In March 1992, First Presbyterian entered into an agreement with the Leydig Memorial Center (Leydig), a nonprofit corporation also located in Dixon, under which Leydig would use the property at 519 Highland for a one-time payment of one dollar.The lease was to be automatically renewed from year to year unless either party notified the other within 30 days of the end of the lease period.Leydig was also to make a monthly deposit into an escrow account for maintenance.

During 1992, Leydig was open three days a week, for a total of 18 hours, to accept, distribute, and sell donated furniture, clothing, and household goods.Leydig was staffed by volunteers and individuals performing community service work under the auspices of the Lee County probation department.Other than the man who shoveled snow in the winter, there was no paid staff.Items were sold at "very reasonable prices" and, on a number of occasions, given free to individuals unable to pay.Leydig did not refuse to provide services to anyone requesting assistance.Gross sales of $22,196 resulted in net income, after payment of sales taxes, of $20,912 in 1992.After expenses, Leydig had revenues of $15,469.14, of which $15,356.60 was donated to various community organizations.Leydig was also used, free of charge, by the Salvation Army to distribute food to needy individuals and on behalf of Goodfellows, a community organization, to collect and distribute toys and food to those in need around Christmas.Leydig also donated books to the Illinois Department of Corrections to start a prison library.

First Presbyterian's application for a property tax exemption for the property leased to Leydig was denied by the Department.First Presbyterian appealed, and, after a hearing, the Department again denied the application.First Presbyterian then filed a complaint in administrative review in the circuit court of Lee County, which reversed the Department and ordered that the parcel was exempt from real estate taxation.This appeal followed.

On review, an administrative agency's decision will generally stand unless it is against the manifest weight of the evidence.Resurrection Lutheran Church v. Department of Revenue,212 Ill.App.3d 964, 969, 156 Ill.Dec. 1009, 571 N.E.2d 989(1991).While the agency's findings and conclusions on questions of fact are prima facie true and correct, where the relevant facts are undisputed, the issue of whether property is exempt is a question of law.Resurrection,212 Ill.App.3d at 969, 156 Ill.Dec. 1009, 571 N.E.2d 989.A statute exempting property from taxation is to be strictly construed in favor of taxation.Chicago Patrolmen's Ass'n v. Department of Revenue,171 Ill.2d 263, 271, 215 Ill.Dec. 655, 664 N.E.2d 52(1996).Each claim for exemption must be determined from the facts presented, and the party seeking an exemption bears the burden of proving the right to an exemption.Chicago Patrolmen's Ass'n,171 Ill.2d at 271, 215 Ill.Dec. 655, 664 N.E.2d 52.While courts do not have the power to create an exemption through judicial interpretation, the determination of whether property use is exclusively charitable is a judicial function.Highland Park Hospital v. Department of Revenue,155 Ill.App.3d 272, 280, 107 Ill.Dec. 962, 507 N.E.2d 1331(1987).

Section 19.2 of the Revenue Act of 1939(Act) exempts from taxation "[a]ll property used exclusively for religious purposes * * * and not leased or otherwise used with a view to profit * * *."35 ILCS 205/19.2(West 1992).There is no all-inclusive definition or specification of what...