Appeal of Kadle Properties Revocable Realty Trust
157 A.3d 825
N.H.2017Background
- Petitioner: Kadle Properties Revocable Realty Trust (Trust) owns an office building in Keene; Config Systems, a for-profit corporation wholly owned by the trustee/beneficiary Daniel Kadle, rents part of the building and operates computer classes there.
- Trust applied for an educational-use property tax exemption under RSA 72:23, IV based on Config Systems’ classroom use of part of the building.
- City of Keene denied the exemption; Trust appealed to the New Hampshire Board of Tax and Land Appeals (BTLA).
- At the BTLA hearing the City moved to dismiss; BTLA granted the motion, finding the owner (Trust) was not the school/operator and Config Systems (the operator) did not own the property.
- Trust sought reconsideration; BTLA denied it. Trust appealed to the New Hampshire Supreme Court contesting the dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether property qualifies for RSA 72:23, IV exemption when a school occupies but does not own the property | Trust: Exemption should apply because Config Systems operates a school on the property | City: RSA 72:23, IV requires the school to own the property to qualify | Held: RSA 72:23, IV requires the school to own, use, and occupy the property; property did not qualify because Config Systems does not own it |
| Whether joint/related ownership (Trust and Config Systems effectively one entity) can satisfy ownership requirement (arguing entities are “one and the same”) | Trust: Close relationship/joint ownership should allow exemption; cites RSA 72:23, V‑a as supporting joint-owner exemptions | City: V‑a requires each organization independently qualify as exempt; joint ownership alone insufficient | Held: RSA 72:23, V‑a requires each organization independently be eligible; Trust did not claim independent eligibility, so exemption fails |
| Whether definition of “own” in RSA 72:29, VI treats Trust and Config Systems as owner for RSA 72:23 purposes | Trust: RSA 72:29, VI’s definition of “own” (including grantor trusts/beneficial interest) should apply to RSA 72:23 | City: RSA 72:29, VI lists the specific sections it governs; RSA 72:23 is not among them | Held: RSA 72:29, VI does not apply to RSA 72:23 (it enumerates sections to which it applies); court will not add legislative language |
| Whether BTLA application form (A‑9) allowing owner or principal occupant to apply implies occupant can qualify property for RSA 72:23, IV exemption | Trust: Form A‑9 permits principal occupant to apply, implying occupant’s status can qualify the property | City: Procedural form allowance does not alter statutory ownership requirement for exemption | Held: Form does not override statutory ownership requirement; occupancy alone by a qualifying organization does not confer exemption absent ownership or independent statutory qualification |
Key Cases Cited
- St. Paul’s School v. City of Concord, 117 N.H. 243 (N.H. 1977) (interpreting requirement that school must own, use, and occupy property to qualify under RSA 72:23, IV)
- Wolfeboro Camp School, Inc. v. Town of Wolfeboro, 138 N.H. 496 (N.H. 1994) (interpretation of the meaning of “school” in RSA 72:23, IV)
- New Canaan Academy, Inc. v. Town of New Canaan, 122 N.H. 134 (N.H. 1982) (interpretation of “school” in RSA 72:23, IV)
- Appeal of City of Concord, 161 N.H. 344 (N.H. 2011) (RSA 72:23, V‑a allows exemption where occupying organization independently qualifies)
- Appeal of Town of Charlestown, 166 N.H. 498 (N.H. 2014) (statutory interpretation principles; courts are final arbiters of legislative intent)