Green v. Church of Jesus Christ of Latter–Day Saints

• Decision Date: 23 January 2013
• Docket Number: Sept. Term, 2012.,No. 35,35
• Citation: 430 Md. 119,59 A.3d 1001
• Parties: B. Marie GREEN, Supervisor of Assessments of Montgomery County v. CHURCH OF JESUS CHRIST OF LATTER–DAY SAINTS.
• Court: Maryland Court of Appeals

430 Md. 119

59 A.3d 1001

B. Marie GREEN, Supervisor of Assessments of Montgomery County

v.CHURCH OF JESUS CHRIST OF LATTER–DAY SAINTS.

No. 35, Sept. Term, 2012.

Court of Appeals of Maryland.

Jan. 23, 2013.

Steven M. Sullivan, Asst. Atty. Gen. (Douglas F. Gansler, Atty. Gen. of Maryland, and William K. Hammond, Asst. Atty. Gen., Baltimore, MD), on brief, for appellant.

Lauri E. Cleary (Martin J. Hutt of Lerch, Early & Brewer, Chtd., Bethesda, MD), on brief, for appellee.

Argued before BELL, C.J., HARRELL, GREENE, ADKINS, BARBERA, McDONALD, and ALAN M. WILNER (Retired, Specially Assigned), JJ.

BARBERA, J.

Maryland's Property Tax Code provides that a “religious group or organization is not subject to property tax if the property is actually used exclusively for,” inter alia, “a parsonage or convent.” Md.Code (2001, 2012 Repl.Vol.), § 7–204 of the Tax–Property Article.¹ We are asked in the present case to interpret and apply to conceded facts the terms “parsonage” and “convent” as they are employed in § 7–204.

The case has its genesis in the request of the Church of Jesus Christ of Latter-day Saints ² (“the Church”) that it be exempt from paying property tax on an apartment complex in Montgomery County, Maryland. The Church owns and uses the complex to house a revolving group of workers who perform religious ceremonies full-time for a two-year period at the Church's Washington, D.C. Temple. The Church seeks to reacquire a property tax exemption that once was granted to the complex but later was rescinded following a periodic review by the Supervisor of Assessments of Montgomery County. The Supervisor of Assessments has taken the position that the apartment complex does not qualify for a property tax exemption under § 7–204 because the complex is not exclusively used as a parsonage or a convent. ³ The Maryland Tax Court agreed with the Supervisor of Assessments, but the Circuit Court for Montgomery County reversed, holding that the complex should be granted the exemption because it qualified as both a parsonage and a convent. For the reasons that follow, we hold that the Tax Court applied the wrong standard in assessing whether the apartment complex constitutes a convent, so we remand the case for the Tax Court to issue an order granting the exemption consistent with the standards we set forth in this opinion. In light of our dispositionof the case, we do not opine on whether the apartment complex also constitutes a parsonage.

I.

The Church of Jesus Christ of Latter-day Saints, informally known as the Mormon Church, was founded in 1830 by Joseph Smith. In the years since its founding, the Church has grown to a worldwide membership of roughly 14.4 million people. At a local level, church members are divided geographically into wards, which are comparable to parishes or congregations in other faiths. Each ward is supervised by a bishop, who conducts weekly services for members of the ward at a local chapel. Each ward is part of a larger grouping, called a stake, and each stake is comprised of about ten wards. The stakes, in turn, are a part of a temple district, overseen by a temple president. The Washington, D.C. Temple District is made up of 42 stakes, divided into 425 wards, and covers Maryland, Virginia, the District of Columbia, Pennsylvania, and parts of Ohio, Delaware, New Jersey, and New York.

The Temple is considered to be a sacred site and only members of the Church who are in good standing may visit it. This permission to enter the Temple is referred to as a temple recommend, and it is granted for a limited time to members who strictly follow the Church's teachings. Within the Temple, special religious sacraments, referred to as ordinances, are performed. These ordinances may take place only within the Temple, and they may be performed only by specific Church members, who are called ordinance workers. The ordinances include marriages, baptisms, and confirmations.

The Church is run by lay ministers, rather than paid clergy. Bishops, stake presidents, and ordinance workers are all called into service by the Church and perform their duties without compensation. Ordinance workers generally serve for a period of two years and rotate through different assignments at the Temple. They spend most of their time performing ordinances, but they also teach, instruct, minister, and counsel members of the Church within the Temple. A strict religious code is demanded of ordinance workers, and, if they do not follow it, they can be dismissed from service. Approximately 400,000 ordinances are performed in the Washington, D.C. Temple in an average year, or roughly 1,600 per day.

The D.C. Temple opened in Kensington, Maryland in 1974. The Temple is generally open 14 hours a day, five days of the week, serving the roughly 145,000 members who live within the D.C. Temple District. The ordinance workers who serve at the Temple mostly come from outside the D.C. area. In order to accommodate ordinance workers from out-of-town, the Church purchased a 44–unit apartment complex for them to live in, located in Kensington about a mile from the Temple. Between 50 to 60 ordinance workers live in the complex, the majority of whom are retired, married couples. The ordinance workers worship together as a ward each Sunday at a chapel located on the Temple grounds. The Church charges the ordinance workers below-market-value rent as a means of off-setting the operating expenses of the complex.

The 1980 property tax exemption

The Church sought a property tax exemption for the apartment complex in 1979 and was turned down by the Supervisor of Assessments of Montgomery County. The Church sought the exemption pursuant to Article 81, Section 9(c), the then-applicable provision of the Maryland Code that permitted an exemption for properties that were used exclusively for religious purposes.⁴ The decision of the Supervisor of Assessments was overturned on April 30, 1980, by a majority vote of the Property Tax Assessment Appeals Board for Montgomery County.

The appeals board stated that it was “persuaded that the apartments are used exclusively to house volunteers who are brought to this area to work exclusively at the Temple, and that the apartments are used to foster this religious purpose.” The board noted that the rents charged to the ordinance workers were “so low as to be considered at least a partial subsidy of their housing” and this subsidy was in line with the subsidized housing found in parsonagesand convents. The board found the language of the statute to be “somewhat ambiguous” but determined that the purpose of the exemption was to benefit the “residences of persons directly and exclusively involved [in] and dedicated to the perpetuation of public religious worship.”

The Church received the exemption until 2008, when the Supervisor of Assessments of Montgomery County did a periodic review of exempt properties in the county. Upon review, it was determined that the apartment complex should not receive a tax exemption.⁵ The Church received a letter on June 20, 2008, informing it of the decision, but without any explanation for why the exemption was being withdrawn, aside from the assertion that there were “no legal grounds” to support the exemption. The General Assembly had revised the language of the exemption when it created the Tax–Property Article in 1985, but the provision has continued to allow for a tax exemption for a parsonage or convent.⁶

The current tax exemption dispute

The Church appealed the decision to the Property Tax Assessment Appeals Board for Montgomery County, which affirmed the decision of the Supervisor of Assessments, again without explanation. The Church appealed the decision of the board to the Maryland Tax Court, which held a hearing on the matter on June 3, 2009. The Church offered testimony from three Church officials, including a former ordinance worker, who described the organization of the Church, elaborated on the duties of ordinance workers, and provided details about the apartment complex. Other Church officials testified about how the rents typically have not covered the operating costs of the apartment complex and the Church's view on what should constitute a parsonage and convent.

Robert Young, the Associate Director of the State Department of Assessments and Taxation,⁷ testified on behalf of the Supervisor of Assessments. Young said that he consulted with the Supervisor of Assessments in deciding that the apartment complex was not entitled to a property tax exemption as either a parsonage or convent.

Young said that he used the ordinary dictionary definition of the word parsonage, as well as the description offered by the Court of Special Appeals in East Coast Conference of the Evangelical Covenant Church of America, Inc. v. Supervisor of Assessments, 40 Md.App. 213, 388 A.2d 177 (1978).⁸ As for the definition of convent, Young sought guidance from a 1970 report of the Maryland Legislative Council Committee on Taxation and Fiscal Matters. The legislative intent as evidenced by that report was to allow an exemption for religious orders, including monasteries. Young interpreted that information as follows:

And so based on that reading and based on the common ordinary dictionary meaning my definition of a convent or monastery is where a group of men or women take certain vows: Poverty, celibate chastity and obedience to a superior, an abbot or a prioress. And then they live in a convent building or they live in a monastery building.

Young stated he took additional support from a Tax Court case, Life in Jesus, Inc. v. Supervisor of Assessments, No. 06–MI–FR–0610 and Cross–Appeal No. 06–MI–FR–0621 (Md. Tax Court Dec. 31, 2008), in which the Tax Court affirmed a denial of a monastery exemption. Young noted that convents historically have housed groups of unmarried men or women who take lifelong vows of poverty, celibate chastity, and obedience, and live together in a communal lifestyle. He...