H.O.P.E. Through Divine Interventions, Inc. v. Fulton Cnty. Bd. of Tax Assessors, A12A1100.

• Decision Date: 16 November 2012
• Docket Number: No. A12A1100.,A12A1100.
• Citation: 318 Ga.App. 592,734 S.E.2d 288
• Parties: H.O.P.E. Through DIVINE INTERVENTIONS, INC. v. FULTON COUNTY BOARD OF TAX ASSESSORS.
• Court: Georgia Court of Appeals

318 Ga.App. 592

734 S.E.2d 288

H.O.P.E. Through DIVINE INTERVENTIONS, INC.

v.FULTON COUNTY BOARD OF TAX ASSESSORS.

No. A12A1100.

Court of Appeals of Georgia.

Nov. 16, 2012.

Jeffrey Ronald Baxter, Atlanta, for Appellant.

Valerie Anne Ross, Meredith West Germain, for Appellee.

PHIPPS, Presiding Judge.

H.O.P.E. Through Divine Interventions, Inc. appeals the superior court's summary judgment against it and in favor of the Fulton County Board of Tax Assessors. Specifically, the superior court ruled that H.O.P.E.'s real property (hereinafter, “Property”) did not qualify during certain years for an exemption from ad valorem property taxation under OCGA § 48–5–41(a) (4), which pertains to “[a]ll institutions of purely public charity.” We affirm.

Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” ¹ “In our de novo review of the grant of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.” ²

The material facts are uncontested. H.O.P.E. was incorporated solely to provide residential, recovery, employment, self-development and other supportive services to individuals and families with histories of substance abuse, unemployment, homelessness, or criminal behavior. It is a non-profit corporation organized exclusively for charitable purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, and is registered in Georgia as a “charitable organization” pursuant to OCGA § 43–17–5.

In July 2007, H.O.P.E. purchased the Property located in Fulton County; upon the Property was situated a gutted 40–unit apartment building; H.O.P.E. intended to provide upon the Property permanent supportive housing to low-income individuals and families who were homeless or at high risk of becoming homeless and who also were contending with various other special needs. In 2007, 2008, and 2009, H.O.P.E. engaged in the finance, construction, and renovation phases of developing the Property, and the construction and renovation undertakings were completed in November 2009. Meanwhile, no individual or family had been housed on the Property by H.O.P.E., nor had any other charitable services of H.O.P.E. been provided to anyone on the Property. In December 2009, when the apartments and its community center opened, the Property became home to formerly homeless persons. H.O.P.E.'s application that the Property be declared tax exempt as an “institution[ ] of purely public charity” was granted for 2010.

This case concerns years 2008 and 2009. H.O.P.E.'s exemption applications for those years were denied by the Fulton County Board of Tax Assessors, and the Fulton County Board of Equalization likewise concluded that the Property did not qualify for tax exempt status for 2008 and 2009. Thereafter appearing before the superior court, H.O.P.E. and the Fulton County Board of Tax Assessors presented on cross-motions for summary judgment the question whether, based upon the construction and renovation work during tax years 2008 and 2009, the Property qualified for tax exempt status as an “institution[ ] of purely public charity” pursuant to OCGA § 48–5–41(a)(4).

That Code provision states: “The following property shall be exempt from all ad valorem property taxes in this state: All institutions of purely public charity.” ³ The Supreme Court of Georgia has held that “in order for an institution to be granted a property tax exemption pursuant to OCGA § 48–5–41(a)(4), it must satisfy the [three factors set forth in York Rite Bodies of Freemasonry of Savannah v. Board of Equalization of Chatham County⁴] ....” ⁵ In York Rite, the Supreme Court of Georgia held:

In determining whether property qualifies as an institution of purely public charity as set forth in OCGA § 48–5–41(a)(4), three factors must be considered and must coexist. First, the owner must be an institution devoted entirely to charitable pursuits; second, the charitable pursuits of the owner must be for the benefit of the public; and third, the use of the property must be exclusively devoted to those charitable pursuits.⁶

The parties agreed before the superior court that their dispute concerned only the third York Rite factor. Summary judgment was granted against H.O.P.E. and in favor of Fulton County, because the superior court held that H.O.P.E.'s “intended use and preparation for that use” during 2008 and 2009 were insufficient to satisfy that factor.

On appeal, H.O.P.E. contends that the superior court erred in concluding that the Property did not qualify for tax exempt status as an “institution[ ] of purely public charity” ⁷ for tax years 2008 and 2009, when the Property was undergoing construction and renovation. It points out that constructing and renovating the Property were necessary steps because, without their successful completion, “H.O.P.E. would not have been able to ultimately provide permanent supporting housing to formerly homeless men and women at the Property, nor provide the infrastructure and support they need to prepare them for independent and permanent housing.” H.O.P.E. asserts further that there is no evidence that, during the financing, construction, and renovation phases, it used the Property for any non-charitable purpose. Additionally, H.O.P.E. cites evidence that, during the financing phase, it executed agreements with various organizations promising that the acquired funds would be used to provide housing and other supportive services to persons who would live upon the Property.

But given the language of the statutory provision at issue, the long line of judicial decisions interpreting that language, and general principles applicable when determining entitlement to a tax exemption, the superior court properly concluded that the cited tax exemption did not apply to the Property, as urged by H.O.P.E.

We begin by recognizing the following general principles. “Taxation is the rule; exemption from taxation is the exception.” ⁸ “[C]laims for exemption from taxation should generally be construed in favor of the State and against the taxpayers.” ⁹ Therefore, “we strictly construe taxation statutes, and we will not find an exemption unless it is clear that the legislature intended such exemption.” ¹⁰

The pertinent Code provision, OCGA § 48–5–41(a)(4), does not expressly exempt from taxation property at which charitable housing and supportive services are merely contemplated, property for which funding is being procured so as to finance the necessary charitable infrastructure, or property upon which construction and renovation is in progress for its initial charitable use.¹¹ But as stated above, there is extensive case law interpreting the statutory language, including York Rite.¹² In addition to enumerating the three factors, York Rite provided the following guidance as to the third factor (at issue here):

[T]he applicability of this tax exemption will turn upon a determination of how the property is being used by the institution. Mere latent ownership of property by an institution of public charity will not entitle the property to an exemption. Nor will merely making real estate available to other public or charitable institutions for their use be sufficient to qualify for the tax exemption. Instead, the use of the property must be exclusively devoted to conduct that benefits the public by furthering the charitable pursuits of its owner.¹³

Although H.O.P.E. maintains that its construction and renovation work during 2008 and 2009 constituted such “use,” we cannot agree, in light of more than 100 years of decisions by the Supreme Court of Georgia, including York Rite,¹⁴Thomas v. Northeast Ga. Council, Inc., Boy Scouts of America,¹⁵Mu Beta Chapter Chi Omega House Corp. v. Davison,¹⁶ and Trustees of the Academy of Richmond County v. Bohler.¹⁷

The York Rite Court, elaborating further on the third factor, made clear that the dispensation of public charity must exist.¹⁸ There, where the properties at issue were used as “meeting places” and for other purposes primarily by members of the organizations,¹⁹ the Court instructed, “If the [organizations] can establish that the use of their respective properties is exclusively for the administration and dispensation of public charity, then they will have established the third factor.” ²⁰ H.O.P.E.'s quests for the tax exemptions, however, were not based upon any claim that, upon its Property, it was then dispensing charitable housing or other supportive services to the public;²¹ its quests for the exemptions rested upon the construction and renovation efforts as necessary steps toward ultimately providing such charity.

Moreover, the superior court's conclusion that H.O.P.E.'s “intended use and preparation for that use”—as manifested by its construction and renovation work—were insufficient to constitute “use” heeds the seminal case of Trustees of the Academy of Richmond County.²² There, a testator had devised to trustees and their successors certain real estate, the annual product of which was to be appropriated to the erection of a poor-house and for the support of its inmates forever.²³ No poor-house had been erected, but the trustees were accumulating a fund for that purpose and for the purchase of a suitable site therefor, from the income of the devised property. ²⁴ The devised property was taxed, and the trustees sought to enjoin the collection of taxes, claiming that the property was exempt as an institution of purely public charity.²⁵ The Supreme Court of Georgia concluded that the devised property was not exempt, and that the poor-house, “[w]hen it shall come into being and into use, pursuant to the scheme of the founder, it will be exempt from taxation” as an institution of purely...