Supervisor of Assessments of Baltimore County v. Trustees of Bosley Methodist Church Graveyard

• Decision Date: 26 March 1982
• Docket Number: 119,Nos. 118,s. 118
• Citation: 293 Md. 208,443 A.2d 91
• Parties: SUPERVISOR OF ASSESSMENTS OF BALTIMORE COUNTY v. TRUSTEES OF BOSLEY METHODIST CHURCH GRAVEYARD. SUPERVISOR OF ASSESSMENTS OF BALTIMORE COUNTY v. ST. JOHN'S UNITED CHURCH OF CHRIST.
• Court: Maryland Court of Appeals

Page 208

293 Md. 208

443 A.2d 91

SUPERVISOR OF ASSESSMENTS OF BALTIMORE COUNTY v. TRUSTEES OF BOSLEY METHODIST CHURCH GRAVEYARD.

SUPERVISOR OF ASSESSMENTS OF BALTIMORE COUNTY v. ST. JOHN'S UNITED CHURCH OF CHRIST.

Nos. 118, 119.

Court of Appeals of Maryland.

March 26, 1982.

T. Scott Basik, Asst. Atty. Gen., Baltimore (Stephen H. Sachs, Atty. Gen., Baltimore, on the brief), for appellant.

Kenneth T. Bosley, in pro. per. and for appellee, Trustees of Bosley Methodist Church Graveyard.

George W. McManus, Jr. and John A. Moag, Baltimore, for appellee, St. John's United Church of Christ.

Argued before SMITH, ELDRIDGE, COLE, DAVIDSON and RODOWSKY, JJ., and J. DUDLEY DIGGES, Special Judge (Retired).

J. DUDLEY DIGGES, Special Judge (Retired).

These dual tax cases, before us on certiorari issued prior to decision by the Court of Special Appeals, present the common question of whether that portion of real estate owned by a religious organization for use as a caretaker's residence is entitled to an exemption from real property taxation pursuant to Md.Code (1957, 1980 Repl.Vol.), Art. 81, § 9. As the precise statutory language exempting certain church owned property from taxation provides the fulcrum upon which this opinion rests, we here set forth the relevant provisions of Art. 81, § 9 before further addressing the matter.

(a) Generally; exemptions strictly construed.-The following real and tangible personal property are exempt from assessment and from State, county, and city ordinary taxation, except as otherwise stated, which exemptions shall be strictly construed:

(c) Churches.-Property owned by a religious group or organization and actually used exclusively for public religious worship, including parsonages and convents, and property owned by any such group or organization and actually used exclusively for educational purposes. ¹

Both actions before us present appeals by the Supervisor of Assessments of Baltimore County from orders entered in the circuit court for that county affirming Maryland Tax Court decisions that each of the church property caretakers' residences involved here is entitled to an exemption from real estate taxation. The first case concerns the property of the Bosley Methodist Church and adjacent graveyard located in Sparks, Maryland. For the taxable year 1977-78, the appellant supervisor granted a tax exemption for 41/2 acres of the Bosley Church property encompassing the church building and graveyard. The supervisor, however, denied an exemption for the remaining part of the church realty across the road from the church and graveyard consisting of the caretaker's residence and one acre lot supporting the dwelling. Following appellant's denial of the exemption, the Trustees of Bosley Methodist Church, appellees here, pursued administrative appeals culminating in proceedings before the Maryland Tax Court in October, 1978. The record developed in that tribunal discloses that the Bosley trustees provide the home, rent free, to the caretaker and his family primarily in order to ensure that someone is present on the premises to furnish security from vandalism. Additionally, the caretaker and his family clean and maintain the property. The caretaker also possesses the keys to the church and opens the building for all the services and activities that take place there. The tax court found that "the subject property is necessary for the support of the church and graveyard belonging to (appellees)," and on this basis, granted the exemption at issue. The circuit court affirmed.

In a similar vein, the dispute in the second case concerns property owned by appellee St. John's United Church of Christ in suburban Baltimore County. St. John's occupies 31.4 acres with a church, parsonage, meeting house and various other buildings including a separate residence for the caretaker of the property. Like that of the Bosley church, the caretaker for St. John's maintains the church and grounds, opens and closes the church, and provides security with his round-the-clock presence. For the taxable year 1977-78, the Supervisor, although recognizing an exemption for the remainder of the St. John's property, sought to tax the caretaker's residence and one acre lot surrounding the home. Following administrative appeals pursued by the church, the matter reached the Maryland Tax Court in October, 1978. That agency, again finding that "the primary use of the subject property 'is necessary for' and 'fairly incidental to' the main purposes of the exempt institution because it is necessary ... that the (caretaker) be available twenty-four hours a day and that he be provided a residence," granted an exemption from taxation for the caretaker's dwelling. The Circuit Court for Baltimore County, as it did in the Bosley case, also affirmed this decision.

The Supervisor of Assessments now strenuously urges that the tax court (and reviewing circuit court) erred as a matter of law by disregarding the plain statutory language which exempts only church owned property that is "actually used exclusively for public religious worship ... (or) the burial of dead persons." Moreover, asserts the supervisor, as the operative language of the tax exemption statute was changed by the General Assembly in 1972 and is substantially more restrictive than prior versions, the "necessary property test" (applied by the Tax Court in this case and articulated in prior statutes and opinions of this Court) is now obsolete and inappropriate here. Upon analysis of the unambiguous and narrowly drawn language of the exemption statute at issue, we must agree with appellant and will reverse these twin decisions.

It is now established Maryland law, both by legislative enactment and by prior decisions of this Court, that taxation is the rule with exemption the exception, and that statutes providing for tax exemption are to be strictly construed in favor of the State. See Code, Art. 81, §§ 8(1), 9(a); Ballard v. Supervisor of Assessments, 269 Md. 397, 403, 306 A.2d 506, 509-10 (1973) (and cases cited). This is so because "the taxing power is never presumed to have been surrendered by the State." Id. at 403, 306 A.2d at 509. Churches and other religious institutions, fraternal, benevolent, or charitable groups, therefore, enjoy no inherent right to exemption from property taxation, for all real property within the State is liable to taxation unless it is expressly exempt. Md.Code (1957, 1980 Repl.Vol.), Art. 81, § 8(1). ² Thus, to quote a familiar passage, "(t)o doubt an exemption is to deny it," and every claimed exemption must, to be effective, "be distinctly supported by clear and unambiguous legislative enactment." Suburban, Etc. Gas Corp. v. Tawes, 205 Md. 83, 87, 106 A.2d 119, 121 (1954). Nevertheless, while tax exemption statutes are to be strictly construed, this principle permits a fair interpretation in order to effectuate the legislative purpose, and "it does not require that an unusual or unreasonable meaning be given to the words used in an exemption statute." Md. State Fair v. Supervisor, 225 Md. 574, 588, 172 A.2d 132, 139 (1961). It is with these principles in mind that we approach the business of interpreting the tax exemption statute before us.

Sections 9(c) and (d) of Article 81 are a relatively recent legislative product, having been enacted in 1972, ³ and the appellate courts of this State have not until now been called upon to specifically discern the scope of these new tax exemption provisions. ⁴ Moreover, as we determine in this opinion that the repeal and reenactment of the section 9(c) and (d) property tax exemption represents a basic, substantive change which significantly narrows the range of exempt property (rather than merely restating antecedent law), decisions of this Court interpreting prior versions of the tax exemption statute are not dispositive of the question presented here. See, Lodge # 817 v. Supervisor, --- Md. ----, 439 A.2d 591 at 595 (1982). Compare Supervisor v. Peter & John Radio, 274 Md. 353, 335 A.2d 93 (1974); Md. State Fair v. Supervisor, 225 Md. 574, 172 A.2d 132 (1961); Morning Cheer v. Co. Com'rs, 194 Md. 441, 71 A.2d 255 (1950).

Upon commencing our interpretive task in this case, we must, of course, begin with an examination of the operative words of the statute. In doing so, we find an enactment which, contrary to prior versions, is quite tightly drawn. At this juncture, it is important to directly compare the pertinent language of the predecessor version of the church property exemption with the newly enacted statute and to keep this juxtaposition in mind as we consider the arguments presented here. Md.Code (1957, 1969 Repl.Vol.), Art. 81, § 9(4) provided an exemption for:

(4) Churches, parsonages, etc.-Houses and buildings used exclusively for public worship, and the furniture contained therein, and any parsonage used in connection therewith, and the grounds appurtenant to such houses, buildings and parsonages and necessary for the respective uses thereof.

Code (1957, 1980 Repl.Vol.), Art. 81, § 9(c) currently reads as follows:

(c) Churches.-Property owned by a religious group or organization and actually used exclusively for public religious worship, including parsonages and convents, and property owned by any such group or organization and actually used exclusively for educational purposes.

Under the current section 9(c) exemption, therefore, four requirements must be met: first, the property must be "owned by a religious group or organization;" second, the property must be used for "public religious worship;" third, the exempt use must be "actual;" and fourth, the exempt use must be "exclusive."

The record discloses that no public religious worship was ever conducted on the two properties in question, nor, in the case of the Bosley Church and graveyard, was the real estate allocated to the caretaker's residence ever used for burial purposes. The tax court exempted the caretaker's...