State Bd. of Tax Com'rs v. Indianapolis Lodge No. 17, Loyal Order of Moose, Inc., 30223
Decision Date | 15 July 1964 |
Docket Number | No. 30223,30223 |
Citation | 245 Ind. 614,200 N.E.2d 221 |
Parties | STATE BOARD OF TAX COMMISSIONERS, etc., Marion County Board of Review, etc., and James F. Cunningham, Assessor of Center Township, Marion County, Indiana, Appellants, v. INDIANAPOLIS LODGE #17, LOYAL ORDER OF MOOSE, INC., Appellee. |
Court | Indiana Supreme Court |
Edwin K. Steers, Atty. Gen., Lloyd C. Hutchinson, Deputy Atty. Gen., Charles W. Rau, Deputy Atty. Gen., Indianapolis, for State Board of Tax Com'rs.
Richard J. Hartman, O. T. Kilgore, French Elord, Indianapolis, for Marion County Board of Review and Center Tp. Assessor.
George L. Diven, Yaeger & Tinder, Indianapolis, for appellee.
This is an appeal by appellants from a judgment of the Superior Court of Marion County, Room 1, which had reversed and set aside the previous determination and order of appellant state board of tax commissioners with respect to the assessment of tax on appellee's property on the ground that the same was arbitrary and capricious.
Appellants' principal contention on this appeal is that the order of the appellant state board of tax commissioners was not arbitrary and capricious and therefore should not have been set aside by the court below.
Appellee is a non-profit corporation organized under the Act of 1901 1 pertaining to the forming of voluntary corporations for certain specified purposes, such as the conducting of a subordinate lodge of the Loyal Order of Moose. Appellee is the owner of real estate where its lodge hall and club are located in the city of Indianapolis, Indiana, and in the year 1960 filed with the Center township assessor an application for property tax exemption requesting total exemption of its real estate from property tax.
Thereafter on or about September 1, 1960, the Marion County board of review denied the application for property tax exemption to the extent of ten percent (10%) and allowed a ninety percent (90%) exemption of said real estate and improvements, resulting in an assessment for taxation against appellee's real estate and improvements in the total amount of $10,320.00. Appeal was taken to the state board of tax commissioners which sustained the ruling of the board of review. Appeal was thereafter taken to the Superior Court of Marion County, Room 1, which after a trial reversed and set aside the previous determination and order of the state board of tax commissioners, from which judgment appellants have appealed to this Court.
The authority for the enactment of statutes granting the exemption of property from taxation is Art. 10, § 1, of the Indiana Constitution providing:
'The General Assembly shall provide, by law, for a uniform and equal rate of assessment and taxation; and shall prescribe such regulations as shall secure a just valuation for taxation of all property, both real and personal, excepting such only for municipal, educational, literary, scientific, religious, or charitable purposes, as may be specially exempted by law.' (Emphasis added.)
Pursuant to such constitutional provision the legislature has specified under Burns' § 64-201 (1961 Repl.), 2 twenty-two (22) classes of property which may qualify for exemption from taxation. The fifth and eleventh clauses of the Act upon which appellee is claiming its right to total exemption are as follows:
* * *
* * *
Section six of the same statute (Burns' § 64-202, 1961 Repl.), 3 limiting the exemptions authorized by such statute provides:
'If all or any part, parcel or portion of any tract or lot of land or any buildings or personal property enumerated in the preceding section as exempt from taxation shall be used or occupied for any other purpose or purposes than those recited in said section by reason whereof they are exempted from taxation, such property, part, parcel or portion shall be subject to taxation so long as the same shall not be set aside or used exclusively for some one of the purposes specified in said enumeration.'
Here it appears from the evidence that the aforementioned real estate of appellee lodge consisted of a five (5) story building located at 135 N. Delaware Street in the city of Indianapolis, Indiana. The outside dimensions of said building were sixty-five (65) feet frontage on Delaware Street and one hundred ten (110) feet in depth. On the second floor of such building appellee lodge operated a cafeteria which occupied approximately two-thirds (2/3) of the second floor. Such cafeteria was operated by the lodge solely to be utilized by its members, except for the noonday luncheons, five (5) days a week when the cafeteria for a period of four (4) hours served meals to patrons approximately fifty percent (50%) of whom were members of the lodge and the remaining fifty percent (50%) were non-members. The equipment in the cafeteria and in the building generally was owned by the lodge and the money received in the operation of the cafeteria was transferred to the lodge at the end of the quarterly period.
Over a period of twelve (12) months in 1960 the cafeteria grossed approximately $46,000 from all its operations (morning, noon and night), and the net figure for the entire operation of the cafeteria for such year was $3,827.70, such proceeds being used for the charitable purposes for which the lodge was organized. There is further evidence that the money derived from the operation of the cafeteria has solely been utilized for charitable purposes since its inception.
The question of tax exempt organizations providing dining facilities has been discussed in a recent annotation appearing in 72 A.L.R.2d 521, wherein it is stated at p. 534:
The annotation quotes from Christian Business Men's Committee v. State (1949), 228 Minn. 549, 38 N.W.2d 803, wherein the organization served meals to members, other organizations, and to the general public on the premises owned by it. The Court construed the exemption statute to require an exclusive use, but permitted an exemption of portions of the property directly and actually applied to the purposes for which the organization was created, and therefore held the food services were incidental to the organization's charitable activities and reasonably necessary in the furtherance of its charitable program. The serving of meals, the Court stated, was a valuable auxiliary to the work of a charitable institution in getting groups together at meal time which often is the best and most practicable opportunity to arouse their interest in its program and is one of the facilities which make the premises attractive to and convenient for participants in the institution's activities.
Cases holding Y.M.C.A. property was not used exclusively for religious, educational or charitable purposes where cafeteria facilities were either open to the public or restricted to members, were repudiated in Salvation Army v. Hoehn (1945), 354 Mo. 107, 188 S.W.2d 826.
Similarly, in Horton v. Colorado Springs Society (1918), 64 Colo. 529, 173 P. 61, L.R.A., 1918E, 966, the Court held a Masonic Lodge building was not taxable under a statute exempting buildings used exclusively for strictly charitable purposes, although its first floor contained a large room used for dinners, dances, a reading and smoking room and a cigar stand. The Court stated that while the test of the exemption is the use made of the property, the permissible uses must necessarily embrace all which are proper and appropriate to effect the objects of the institution, so that a use incident to the main purpose for which the property is held is not within the prohibitions contemplated in the statute, the Court asserting that the organization required such a building within which to exist in order that the charitable work might be continued, and that the recreational facilities made the building more attractive and tended to increase membership.
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