46 Pa. D. & C.5th 261
Pennsylvania Court of Common P...2015Background
- RCO appeals the Board of Assessment Appeals of Berks County's denial of real estate tax exemption for three Berks County properties.
- RCO is a PA nonprofit corporation since 1944 with federal 501(c)(3) status.
- Properties are: Main Building at 122 North 10th Street, Outbuilding at 129 Moss Street, and Parking Lot at 127 Moss Street (all in Reading, PA) with respective parcel IDs.
- Property location falls within Reading School District; RCO does not lease or earn rental income from the properties.
- RCO's activities involve producing large musicals off the properties; the Main Building is storage with limited rehearsal space; the Outbuilding is storage; the Parking Lot provides parking access.
- RCO filed for real estate tax exemptions on August 20, 2014; hearing held October 1, 2014; final denial notices mailed October 8, 2014; appeal filed November 2014; court dispute centers on whether RCO is a purely public charity under § 8812(a)(3).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RCO qualifies as a purely public charity under § 8812(a)(3). | RCO advances a charitable purpose per HUP/Act 55. | Board contends RCO fails beyond private profit motive, thus not a pure charity. | Yes; RCO advances a charitable purpose. |
| Whether RCO donates or renders gratuitously a substantial portion of its services. | RCO liberal in waiving fees and donating tickets; provides props/sets to schools. | RCO must show substantial gratuitous services under HUP/Act 55. | Yes; gratuitous or donated services meet the 5% threshold per Act 55. |
| Whether RCO benefits a substantial and indefinite class of persons open to the general public. | Productions open to the general public; fees waived for those unable to pay. | Must show broad public benefit beyond a defined privileged group. | Yes; services available to the general public; aid to those unable to pay. |
| Whether RCO relieves the government of some of its burden. | Educational outreach and cost savings to districts reduce government burden. | Need government service relief under Act 55 criteria. | Yes; RCO provides services government would otherwise fund or support. |
Key Cases Cited
- Hospital Utilization Project v. Commonwealth, 507 Pa. 1 (Pa. 1985) (HUP test for charitable exemptions)
- Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, 44 A.3d 3 (Pa. 2012) (defines pure charity and applies HUP/Act 55 interplay)
- In Re Appeal of Sewickley Valley YMCA, 774 A.2d 1 (Pa. Cmwlth. 2001) (donation/gratuitous services analyzed in HUP context)
- Unionville-Chadds Ford School District v. Chester County Board of Assessment Appeals, 714 A.2d 397 (Pa. 1998) (public charity requires open, indefinite access to the public)
- St. Margaret Seneca Place v. Board of Property Assessment Appeals and Review, 536 Pa. 478, 640 A.2d 380 (Pa. 1994) (government burden relief not required to be fully funded by charity)