The Chapel v. Testa
950 N.E.2d 142
Ohio2011Background
- The Chapel is a 1953 nonprofit organizing two churches, including a Green County property acquired in 2000–2001 for a new church and surrounding land.
- The Chapel sought exemption for a portion of the Green property under R.C. 5709.07(A)(2) (house of public worship) and R.C. 5709.12(B) (charitable use).
- The Commissioner granted the house-of-public-worship exemption to about 57 acres and denied the charitable-use exemption for the recreational land.
- The BTA affirmed the denial of the charitable-use exemption, modifying the taxable/exempt boundary between parcels.
- Recreational land was used by the public for sports, camps, and jogging paths, with thousands of nonmembers using the facilities in 2008.
- The issue on appeal is whether the recreational land qualifies for exemption under R.C. 5709.12(B) independent of the house-of-public-worship exemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether land open to the public for recreation qualifies for charitable-use exemption. | The Chapel argues the land is exempt under 5709.12(B) as charitable use. | The Commissioner/BTA held public recreation is not a charitable use and linked it to public-worship use. | Yes; the land qualifies for exemption under 5709.12(B). |
| Whether religious ownership/motives defeat charitable-use exemption. | Ownership by a religious institution does not defeat exemption if use is charitable. | Ownership and religious motives are relevant to exemption under 5709.12(B). | No; religious ownership/motivation do not defeat exemption where use is charitable. |
| Whether the waiver and prospective-use issues affect the outcome. | The Chapel relied on prospective-use evidence to satisfy exemption. | The Commissioner did not address prospective-use, but waived arguments by not raising them timely. | Waiver of certain arguments; remand for exemption as of the lien date on recreational acreage. |
| What is the correct acreage portion exempt as recreational use? | Recreational acreage should be 18.6795 acres exempt as public recreation. | Line between exempt and taxable should be determined by BTA considering past findings. | 18.6795 acres are exempt; remand to finalize delineation as needed. |
| Is the BTA's approach to the exemption legally correct after True Christianity and Church of God decisions? | The Chapel aligns with True Christianity/North Ohio rulings that religious ownership does not bar charitable-use exemption. | BTA relied on a misreading of case law by insisting the usage was ancillary to worship. | Yes; decisions reversed; the exemption should be granted.” |
Key Cases Cited
- Highland Park Owners, Inc. v. Tracy, 71 Ohio St.3d 405 (1994) (charitable-use exemption requires property be used exclusively for charitable purposes)
- True Christianity Evangelism v. Tracy, 87 Ohio St.3d 48 (1999) (religious ownership/motives do not defeat R.C. 5709.12(B) when use is charitable)
- Church of God in N. Ohio v. Levin, 124 Ohio St.3d 36 (2009) (public worship not itself a charitable use; charitable-use exemption is separate)
- First Baptist Church of Milford, Inc. v. Wilkins, 110 Ohio St.3d 496 (2006) (ownership by religious institution does not disqualify property from R.C. 5709.12 exemption)
- NBC-USA Hous., Inc.—Five v. Levin, 125 Ohio St.3d 394 (2010) (use, not the nature of the institution, governs exemption under 5709.12(B))
- Sylvania Church of God v. Levin, 118 Ohio St.3d 260 (2008) (ownership and use on lien date relate to jurisdiction and merits of exemption)
- Performing Arts School of Metro. Toledo, Inc. v. Wilkins, 104 Ohio St.3d 284 (2004) (owner status and jurisdictional questions in exemption claims)