Girl Scouts of Du Page County Council, Inc. v. Department of Revenue

Decision Date12 October 1989
Docket NumberNo. 2-89-0170,2-89-0170
Citation545 N.E.2d 784,189 Ill.App.3d 858,137 Ill.Dec. 131
Parties, 137 Ill.Dec. 131 GIRL SCOUTS OF Du PAGE COUNTY COUNCIL, INC., Plaintiff-Appellant, v. The DEPARTMENT OF REVENUE, Defendant-Appellee (Du Page County Board of Review, Defendant).
CourtUnited States Appellate Court of Illinois

Frank E. Jeffers III, Wheaton, for Girl Scouts of Du Page Co. council.

Neil F. Hartigan, Atty. Gen., Michael J. Goldrick, Jan E. Hughes, Asst. Attys. Gen., Chicago, Robert Ruiz, Sol. Gen., for Illinois Dept. of Revenue, and Du Page County Bd. of Review.

Justice NASH delivered the opinion of the court:

In this action brought by plaintiff, Girl Scouts of Du Page County Council, Inc., to set aside the decision of the Department of Revenue (the Department), the trial court affirmed the Department's denial of an exemption for property taxes pursuant to the Revenue Act of 1939 (Ill.Rev.Stat.1985, ch. 120, par. 500.7) for a parcel of plaintiff's property. On appeal, plaintiff contends that the court erred in affirming the Department's decision denying an exemption from real estate property taxes to the site manager's residence and surrounding property on the grounds the property was not used exclusively for charitable purposes. We affirm.

Plaintiff, Girl Scouts of Du Page County Council, is an Illinois not-for-profit corporation chartered by the Girl Scouts of America. The Girl Scouts own approximately 120 acres in Du Page County known as Camp Greene Wood consisting of 11 contiguous parcels of property upon which they maintain their Council Service Center, three cabins, a picnic pavilion, tent sites, storage buildings, a pond, nature trails, the site manager's facility, and other sites and buildings for the use of scouts and leaders.

The Girl Scouts have hired a site manager and require him to live on the premises to maintain its property and keep it secure. The site manager's facility is located on the main road into Camp Greene Wood, and all persons, troops, or groups are required to check in and out upon entering or leaving. This facility was constructed by the Girl Scouts in 1980 through donations and volunteer labor and is a two-story building; it has an upper floor containing three bedrooms, 1 1/2 baths, a kitchen, dining room, and living room. The site manager uses the dining room area as his office, in which he keeps his desk and records, key box, and radio base station. The radio is left on at all times when users are in camp. The basement contains a garage, and one half of the basement is used to store such items as the Girl Scout truck, tractor, cross-country skis, and minor camping equipment.

The Girl Scouts pay for the telephone and for maintenance of the facility, and the site manager pays for electricity and heat. The Girl Scouts have made living in the facility a condition of the site manager's employment, and he pays no rent. In 1986, the tax year for which the Department denied tax exemption to a portion of the site manager's facility, the site manager lived there with his mother.

The job duties of the site manager include patrolling the camp sites, repairing equipment, dispensing equipment and keys, maintaining lawn care, removing snow, checking the camp's perimeter fence, and checking in groups using the camp. Three of the camp buildings have a security system which directly transmits an alarm to an outside security company. The site manager is also responsible for engaging and disengaging these systems when necessary. He is on call 24 hours a day on the five days a week that he works and is the person all campers are instructed to contact in case of an emergency. On the site manager's days off, a neighbor who lives across the street from the camp performs the job duties. The site manager does not direct camp programming or activities and is not involved in the camp leadership.

In 1987, the Department of Revenue issued a tax exemption certificate for Camp Greene Wood for 1986 and subsequent years, but denied an exemption from property taxes for the parcel of property which included the site manager's facility because it was not used exclusively for charitable purposes. The Girl Scouts petitioned for administrative review, after which the Department modified its total denial of exemption and exempted from real estate taxes for 1986 all portions of Camp Greene Wood except the ground on which the site manager's residence is located, one-half of the lower level of the residence, and all of the upper level of the residence, except the office area. In April 1988, the Girl Scouts sought relief under the Administrative Review Law (Ill.Rev.Stat.1987, ch. 110, par. 3-101 et seq.) in the circuit court which resulted in a judgment affirming denial of the exemption, from which they appeal.

As the relevant facts are undisputed, whether the property is exempt is a question of law (Weslin Properties, Inc. v. Department of Revenue (1987), 157 Ill.App.3d 580, 583, 109 Ill.Dec. 696, 510 N.E.2d 564) and whether it is entitled to exemption 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.

All property is subject to taxation unless specifically exempted by statute. (Benedictine Sisters of the Sacred Heart v. Department of Revenue (1987), 155 Ill.App.3d 325, 327, 108 Ill.Dec. 309, 508 N.E.2d 470.) The Illinois Constitution provides in relevant part:

"The 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.)

The Illinois Revenue Act of 1939 exempts certain property from taxation, including:

"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 * * * and all property of not-for-profit organizations providing services or facilities related to the goals of educational, social and physical development * * * when such property is actually and exclusively used for such charitable or beneficent purposes * * *." Ill.Rev.Stat.1987, ch. 120, par. 500.7.

This exemption is allowed only for property used exclusively for the stated purpose. (Ill.Rev.Stat.1987, ch. 120, pars. 500.2, 500.7.) Statutes granting tax-exemptions are construed strictly in favor of taxation, and the party claiming the exemption has the burden of proving by clear and convincing evidence that the property in question falls within the terms of the exemption statute. (Cantigny Trust v. Department of Revenue (1988), 171 Ill.App.3d 1082, 1085, 122 Ill.Dec. 259, 526 N.E.2d 518.) The exclusive use requirement of the exemption statute is satisfied where the property is used primarily for the exempted purpose, although 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.) Residential property satisfies the primary purpose test only if either (1) the resident-employee performs an exempt function and is required by those exempt duties to live in the residence, 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 determining whether the primary purpose of property makes it tax exempt, the courts have recognized two distinct situations: (1) where the property as a whole, or in unidentifiable portions, is used both for an exempt purpose and a nonexempt purpose, the property will be wholly exempt only if the exempt use is primary and the nonexempt use is incidental; and (2) where distinct portions of the property are used for exempt purposes and the remainder is used for nonexempt purposes, the remainder alone is taxable if it is a substantial portion of the property. (Illinois Institute of Technology v. Skinner (1971), 49 Ill.2d 59, 66, 273 N.E.2d 371; Metropolitan Sanitary District v. Rosewell (1985), 133 Ill.App.3d 153, 156, 88 Ill.Dec. 492, 478 N.E.2d 1100; Highland Park Hospital v. Department of Revenue (1987), 155 Ill.App.3d 272, 278, 107 Ill.Dec. 962, 507 N.E.2d 1331.) Other cases...

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