If it 'bе conceded that the petitioner, Vanderbilt University, is doing business in North Carolina within .the meaning of our franchise and income tax laws, it does not follow аs a matter of course that the petitioner is liable to the State of North Carolina for such taxes in light of the exemptive provisions in our Revenue Act.
The determinative question on this appeal is whether or not Vanderbilt University is liable for franchise taxes pursuant to the provisions of G.S. 105-122, and income taxes pursuant to the provisions of G.S. 105-134. In this connection, we must determine whether or not the exemptive provisions of G.S. 105-125 with respect to fran *746 chise taxes, and the exemptive provisions in G.S. 105-138, subsection (3), with respect to income taxes, apply to Vanderbilt University.
Article V, section 5, of оur State Constitution declares in pertinent part that: “Property belonging to the State or to municipal corporations, shall be exempt frоm taxation,” and that “the General Assembly may exempt cemeteries andi property held for educational, scientific, literary, charitablе, or religious purposes * *
This Court has interpreted our statutes pertaining to
ad valorem
taxes to mean that it is the use to which the property is devoted ráther than the character of the owner that detеrmines whether the property is exemptible thereunder.
Odd Fellows v. Swain,
In determining whether or not the exemptive provisions of G.S. 105-125 apply to Vanderbilt University with respеct to franchise taxes, and whether the exemptions provided/ for in G.S. 105-138, subsection (3), with respect to income taxes, apply to Vanderbilt University, wе must apply an entirely different rule from that applied in determining'whether property owned by an educational institution is subject to ad valorem taxes. As pointed out hereinabove, we determine the liability for an ad valorem tax based on the use of the property and not on the character of the owner. Here, we must determine the exemption from liability for franchise taxes based on the character of the owner as set out in G.S. 105-125; and with respect to the exemption of payment of income taxes we must base our decision (1)‘ on the character of the recipient of the income and (2) on the use the recipient makes of such income, G.S. 105-138.
G.S. 105-125 provides: “None of the taxes levied in § 105-122 (franchise or privilege tax on domestic аnd foreign corporations) * * * shall apply to religious, fraternal, benevolent, scientific or educational corporations, not oрerating for a profit * * •
G.S. 105-138 provides: “The following organizations shall be exempt from taxation (income) under this article: * * * (3) * * corporations organized or trusts created for religious, charitable, scientific, or educational purposes, * * * no part of the net earnings of which inures to the benefit of any private stockholder or individual.”
As to liability for franchise taxes, we interpret G.S. 105-125 to expressly exempt a foreign corporatiоn from franchise taxes if such corporation is an educational institution not operated for profit.
*747 Likewise, with respect to income tаxes levied pursuant to G.S. 105-134, G.S. 105-138 exempts corporations organized for educational purposes, “no part of the net earnings of which inures tо the benefit of any private stockholder or individual.”
We can find nothing in our franchise or income tax laws that limits the exemption of educationаl institutions to those located within North Carolina. The exemption provided in G.S. 105-296 (4) deals only with exemption from ad valorem taxes and has nothing whatever to do with franсhise or income taxes.
Ordinarily, the interpretation given to the provisions of our tax statutes by the Commissioner of Revenue will be held to be prima jade correct and such interpretation will be given due and careful consideration by this Court, though such interpretation is not controlling.
Moreover, this Court will not follоw an administrative interpretation which, in its opinion, is in conflict with the clear intent.and purpose of the statute under consideration.
Cannon v. Maxwell, Com’r. of Revenue,
205. N.C. 420,
The only way wе could uphold the ruling of the court below would be to ignore the clear and unequivocal exemptive provisions of our revenue statutes оn the subject and adopt the view expressed in 51 Am. Jur., Taxation, section 556, page 549, where it is said: “Right of Foreign Institutions to Benefit of Tax Exemption. — The courts generally construe the constitutional and statutory provisions granting such institutions exemptions from taxation to refer and apply only to the institutions of the state, and not to those of foreign states, particularly when they do not dispense their charity or benevolence in the state, or devоte their property therein to such purposes in the state. Exemption to charitable, educational, and religious organizations is predicated upon the fact that they render service to the state, for which reason they are relieved of certain burdens of taxation. The еffect of an exemption is equivalent to an appropriation. It cannot be said to be the intent of the legislature to make appropriation for the benefit or maintenance of foreign charities which, at best, have a remote chance only of benefiting the citizеns of the state granting the exemption * *
*748 In Rubber Co. v. Shaw, Com’r. of Revenue, supra, in considering the loss carry-over provisions contained in G.S. 105-147 (6) (d) of our Revenue Act, which carry-over provisions were made applicable to foreign and domestic corporations alike as well as to resident individuals, we said: “Our Legislature was under nо constitutional or other legal compulsion to allow any carry-over to be deducted from taxable income in a future year. It enacted the carry-over provisions purely as a matter of grace * * This is exactly what the General Assembly has done with respect to educational corporations not operated for profit, without limiting such grace to domestic corporations only. •
The' General Assembly could hаve limited the loss carry-over provisions of our Revenue Act to domestic corporation and to resident individuals, but it did not see fit to do so; it elected to treat domestic and foreign corporations alike with respect to such loss carry-over provisions.
Since the'statutory provisions with respect to exemptions contain^ ed in G.S. 105-125 and G.S. 105-138 are clear and unambiguous, we do not think this Court should read into the language of the General Assembly a meaning that in our opinion the language used by the General Assembly does not support. Therefore, we do not concur in the purportеd finding of fact No. 5, hereinabove set out, which is in reality a conclusion of law.
The Tax Review Board has found that Vanderbilt University is an educational institution operating solely for educational purposes and that no part of its net earnings inures to the benefit of any private stockholder оr individual. The Board has also found that the annual rental income from the petitioner’s Charlotte property is placed in the general fund of thе University along with its income from endowments, contributions, tuition fees, and other items of income, and is used exclusively for educational purposes.
Thеse findings bring the petitioner squarely within the exemptive provisions of G.S. 105-125 and G.S. 105-138 with respect to franchise and income taxes.
Therefore, the judgment of the court below is Reversed.